Kathmandu. Nepal Insurance Authority (NEA) has conducted an on-site inspection of six insurance companies along with one reinsurer in the month of July and August of the current fiscal year 2083/84 focusing on the issue of corporate governance and financial discipline of the insurer.
According to the authority, a site inspection was conducted at the head office of 3 life insurers, including regular in 2 companies and emergency in 1 company. Under this, regular on-site inspection was conducted at Asian Life Insurance Company Limited and IME Life Insurance Company Limited. Under the emergency inspection, an inspection was conducted at Sun Nepal Life Insurance Company Limited. The Insurance Authority conducted an on-site inspection at the life insurer’s office for two weeks.
Similarly, the Authority has conducted an emergency inspection of the government-owned reinsurer Nepal Reinsurance Company Limited. Apart from this, regular on-site inspections have been conducted at non-life insurers Shikhar Insurance Company Limited and IGI Prudential Insurance Limited.
During the on-site inspection, the underwriting practice of the insurer, the business of temporary insurance, the financial interest of the insurer’s directors and top management in investment, internal control, corporate governance, the insurer’s involvement in anti-money laundering, election of the board of directors, the expenditure incurred for the promotion of the insurance business, the expenditure on agent commission and incentives, the appointment of staff and attitude development, and the qualifications of the department heads were the main issues of interest.
According to the employees who participated in the inspection, a written reply has also been received from the insurer regarding the discrepancies and lapses found during the on-site inspection. The board of directors of the insurance authority should decide on the issue of serious negligence and mischief after receiving the reply from the insurer. For this, the regulatory wing of the authority has prepared a report and submitted it to the chairman through the executive director. The source said that even after a month of the completion of the site inspection work, the report of the site inspection has not yet been submitted to the board of directors of the authority.
Meanwhile, the regulatory section has already submitted the report on the basis of the on-site inspection of micro-insurance companies to the chairman through the executive director, but no decision has been taken to take any action.
The NEA had carried out an on-site inspection of 2 life insurers, 1 non-life insurer and 1 broker’s office in the last fiscal year.
