Kathmandu: Nepal Insurance Authority has drawn the attention of all companies to complete the financial audit on time to avoid any possible legal action and penalties.
According to the recently executed new act, Insurance Act 2079, the financial audit of an insurer must be completed within three months of completion of each financial year. And the insurer must submit the financial report to the Authority within six months from the completion of the last financial year. The Authority has reminded all the insurers the provision for financial audit as per the section 87 of the Insurance Act,
As of now, seven life insurance companies have yet to complete the audit of previous financial year 2077-78. None of the life insurers have yet submitted the financial audit report for the last FY 2078-79. The audit report preparation of life insurance companies is delayed due to delay in the actuarial valuation report preparation. The financial audit report preparation is conducted only after the approval of actuarial valuation report.
According to the Nepal Insurance Authority, 12 general insurance companies have not completed their financial audit and submitted report to the Authority yet for the FY 2078-79. Only one month and ten days left for the deadline.
The new Insurance Act stipulates that insurance companies that do not prepare and submit financial audit reports on time will have to pay fines on a daily basis. Although this rule existed in previous years, the authority had not enforced it. Since, the new Insurance Act has hiked the penalty fee, the insurers are supposed to complete their financial audit report preparation on time.
