Kathmandu. The Board of Directors of Nepal Insurance Authority (NEA) is afraid to take action against 6 insurance companies.

The NEA had found serious mistakes during an on-site inspection in the third week of November. After serious errors were found during the monitoring, the NEA had given seven days time to the six companies to explain why they would not take action.

According to NEA, Neco Insurance, Asian Life Insurance, Nepal Re-Insurance, Himalayan Re-Insurance, Sanima GIC and other insurance companies have already submitted the citation papers.

According to a source at the authority, action should be taken against all the 6 companies after submitting the clarification.

“After the companies submitted a clarification to the authority, we have clearly submitted a report to the board of directors on which company has been found to be making any mistakes and what action should be taken,” said a source at the authority. It has also been performed. ’

According to sources, the work to be done by the employees of the authority has been completed and the file has reached the board and the decision of the board of directors to take action has now been stopped. Sources claim that the file that went to the board of directors after completing all the processes from the concerned department has not been found to know the reason, why and in whose interest it was stopped.

NEA Spokesperson and Director Pujan Dhungel Adhikari said that the process of action will be taken by the Board of Directors and it is under investigation. “The file has reached the board of directors,” she said, adding, “It is now in the process at the board of directors.” ’’

On the other hand, other employees of the authority say that it is not a normal matter for the board of directors to stop the companies found in the field inspection without taking action on time. It has been said that various questions have been raised among the employees of the NEA after the process of action was stopped by the Board of Directors.

“Since it is clear that the insurer has not complied with Section 67 of the Insurance Act, 2079, why not impose a fine of Rs 200,000 (for the first time) on the insurer as per clause (a) of sub-section (4) of Section 138 of the Insurance Act, 2079?” In this regard, it is stated that a written explanation should be submitted within seven (7) days from the date of receipt of the letter as per the sub-section (1) of Section 139 of the Insurance Act, 2079.

Section 67 of the Act states that a partnership shall not be a business or property acquisition. Section 67 (1) states that an insurer shall not carry on any business or property in partnership with its director, the sole family of the director, the primary shareholder, the financial interest, the insurer or any firm, company or institution or the head of the executive who is the managing agent of the insurer or is a shareholder.

Similarly, Section 67 (2) of the Act states, “Prior to the commencement of this Act, an insurer shall segregate his business or property in partnership with any firm, company or institution or executive head of any firm, company or institution or executive of its director, who is a managing agent or is a shareholder of the insurer or is a managing agent of the director, or has attached any property to such business or property within six months of the commencement of this Act.”