Kathmandu: The lack of experienced professional actuaries in homeland has been a major challenge for the corporate transparency of the new life insurance companies.
Some of the new life insurance companies are unable to appoint actuary for their actuarial valuation which results delay in financial report preparation and annual general meeting.
Though Tribhuwan University has started the formal education of actuaries, the market has to wait for few more years to get the cerfied and experienced actuaries in Nepal.
As per the Insurance Board (IB) life insurance companies Guransh Life Insurance, IME Life Insurance and Reliable Nepal Life Insurance have not received any principle consent for actuarial valuation of the FY 76/77. There is a provision of accomplishment of the AGM within six months of the completion of last FY.But Insurance Companies have been failure to fit on it.
Out of the 19 life insurance companies, only 15 life insurance companies have received principle consent from the board for the actuarial valuation of FY 76/77. The state owned Rastiry Beema Sansthan has yet to accomplish its financial audit since FY 2071/72.Delay in financial audit and actuarial valuation give ample space to raise questions over the corporate transparency of the concerned company.
Insurance companies have been facing this problem for a long time due to lack of actuaries in Nepal. When it comes to relying on foreign actuaries, they do not give much priority to new life insurance companies or the life Insurers with limited business volume. Higher the business volume, higher the actuarial fee of the actuary.
The IB has implemented NFRS to all life insurance companies since the last fiscal year. This has also created problems in the audit of companies in the early years.
The IB has repeatedly issued instructions to the companies to prepare quick audits but they have not been working under the pretext of actuarial. The Board is of the opinion that if the companies can prepare the audit of the Fiscal Year 2076/77, there will be no problem in the audit and actuarial assessment of the Fiscal Year 2077/78.
However, there are indications that the actuarial valuation of FY 2077/78 will be much delayed as the valuation of the previous FY has not been accomplished yet.