‘Police Report is Mandatory for The Appointment of CEO or Member of BODs’

Kathmandu: Nepal Insurance Authority has introduced a new provision for the appointment of chief executive officer(CEO) and Board of Directors(BODs). NIA has directed all the insurers to go through ‘fit and proper’ test before recommendation of the name of CEO or member of BODs.

The regulatory authority has introduced the new provision to avoid the chances of appointment of BODs member or CEO involved in criminal offense. Now, any officials involved in financial crime too will be deprived of appointment.

There is a clear provision in the Insurance Act 2079 that persons involved in criminal activities cannot be directors and CEOs. But the NIA has made the police report mandatory.

In addition, a person who is interested to buy 1 percent or above promoter shares must submit a police report when seeking the Authority’s approval to buy the share. A shareholder who owns more than one percent of shares is assumed as one of the major shareholder.

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