Nepal Insurance Authority Penalizes Eight Insurance Companies for Non-Compliance with Insurance Act 2079 Provisions

Kathmandu. The Nepal Insurance Authority has taken action against eight insurance companies for failing to comply with the provisions of the Insurance Act 2079. Action was taken against these companies for not operating in accordance with the legal arrangements specified by the Insurance Act.

The companies facing action include Nepal Life Insurance, Asian Life Insurance, Nepal Reinsurance Company, Himalayan Reinsurance, NECO Insurance, Himalayan Life, Oriental Insurance, and Alliant Insurance Broker Company, informed Authority Spokesperson Pujan Dhungel.  

Similarly, the Chief Executive Officer (CEO) of Nepal Reinsurance Company, Surendra Thapa, was subjected to action in the nature of a warning or directive for institutional reform.  Likewise, Alliant Insurance Broker was suspended for a period of three months for engaging in activities contrary to regulations.

The Authority stated that, apart from these two, the remaining penalized insurance companies were fined NPR 200,000 each as per the provisions of the prevailing Insurance Act.

Section 138, Sub-section 4 of the Insurance Act stipulates that the Authority can impose a fine ranging from NPR 200,000 to NPR 5 million on the concerned body for any act contrary to the directives issued by the Authority.  

For the first-time violation of the directive, a fine of two lakh rupees is imposed; for repeating the same mistake a second time, twenty-five lakh rupees; and for the third time or more, a fine of fifty lakh rupees for each instance is stipulated.  

The Authority imposed the fine equivalent to the minimum amount for the first instance.