Extreme Mistrust of the Federal Parliament Towards the Structure of the Insurance Authority

Kathmandu ; Regulator body, Nepal Insurance Authority It has been found that the sovereign parliament has extreme distrust regarding the structure insurance authority, From the bill approved by the President’s Office on 30th of Chaitra last year to make some related to terrorism chapter, by amending the Insurance Act 2079, it is provided that the reporting of transactions related to terrorism and money laundering in section 69 should not be done to the Nepal Insurance Authority.

Instead of its the arrangements have been made to in the financial unit related to terrorism control. Insurance Act 2079 has been amended. The Insurance Act has been amended through the ‘Act to Amend Certain Acts Related to Prevention of Money Laundering and Promotion of Business Environment’. The amended Act has been certified by the President on 30 March 2080. As the President has approved, the law has come into effect from the 30th of Chaitra.

Two provisions in the Insurance Act 2079 have been changed. The words “authority and” in sub-section 3 of section 69 of the former Act have been deleted. There was a sentence that the information related to asset laundering should be submitted to the authority and the financial unit. Now that the insurance authority has been removed, now only the financial unit is left, now the employees of the insurance company will have to report directly to the financial unit of the central bank.

It is said in that section, ‘If it is known or received information that any person has done or assisted in doing the act as per sub-section 2, or if there is a suspicion that such an act has taken place or if there is a reasonable reason to suspect, the insurer shall inform the same immediately (‘Authority and’ -Chaitra 30 (removed from the approved bill on 10) must be provided to the financial information unit established in accordance with the prevailing law.’ Previously, if someone did such a thing in the Act, there was a provision that the information about it should be given to the Nepal Insurance Authority and the Financial Information Unit of the Central Bank, but now there is a provision that the information should be given only to the Financial Information Unit of the Central Bank.

According to a member of the Federal Parliament, Nepal Insurance Authority has been removed for reporting black money because there is no reliable environment due to the poor condition of the Nepal Insurance Authority and the lack of capacity building. Similarly, section 70 of the Act has also been amended. At present, section 70 provides for an actuarial assessment. Earlier in the Insurance Act, the subject of insurance assessment was left out. The drafters of the Insurance Act had unknowingly omitted the subject of insurance assessment in the draft by the employees of the then insurance committee.

After the addition of that point, the current actuarial evaluation has gained validity. According to insurer insurance business has to get his economic status, assets, liabilities and financial status evaluated by the insurer appointed with the approval of the authority. A copy of the evaluation report given by the insurer shall be submitted by the insurer to Nepal Insurance Authority.

Previously, the provision of appointing a compliance officer in Section 70 has been removed from the Act. This provision will be included in the institutional governance guidelines. Edited: Some irrelevant content has been added and removed through editing.