Kathmandu: The Insurance Board(IB) has started seeking clarification from the insurance company which failed to prepare the financial statements and annual audit report of last fiscal year 2078/79 within the stipulated time.
Contrary to the provision that the audit report must be submitted within five months of the completion of the financial year, most of the insurance companies have not been able to prepare the financial statements for the last two years. Further, the provision of the Insurance Board that the financial audit report must be submitted within ten months of the completion of last financial year too has been widely defied by the insurers. The insurers have been claiming that the delay is caused due to the introduction of NFRS in insurance industry and the delayed actuarial valuation due to the ongoing pandemice.
No life insurance company has been able to prepare audit report in the previous fiscal year 2077/78. Of the non-life insurance companies, only Sanima and Premier Insurance Company have held the annual general meeting(AGM) of the last fiscal year 2077/78.
Life Insurance companies Nepal Life Insurance, Gurans Life Insurance, Sun Nepal Life Insurance, IME Life Insurance, Reliable Nepal Life Insurance, Sanima Life Insurance, Union Life Insurance, state-owned Rastriya Beema Sansthan, non-life insurance companies The Oriental Insurance, National Insurance, state-owned non-life insurer Rastriya Beema Company has been fined Rs. 10,000 each for being unable to prepare the financial audit report of previous fiscal year 2076.77.
The IB has been instructing the companies to prepare financial statements as soon as possible. The regulatory authority has taken action against the insurance companies which had not prepare the audit report in the previous fiscal year.
The IB has fined the insurer who failed to submit the financial statements of 2076/77 and has also written to the insurers who are yet to submit the audit report of 2077/78 and asked written clarification. It has been learnt that most of the insurance companies have yet to submit the actuarial valuation report to the regulatory authority.
The annual financial and audit report of the life insurers are prepared only after the actuarial valuation report is approved by the IB. The finalization of the financial and audit report is possible only after the approval of the actuarial valuation report by the board of the IB. The insurers are obliged to submit their annual financial audit report to the regulatory authority before officially publishing it.