Kathmandu: Out of 18 general insurance companies, three general insurers seem failure to meet the deadline of financial audit for the last financial year 2078-79. Indian insurer’s branch offices National Insurance, Oriental Insurance, and state-owned general insurer Rastriya Beema Company have not prepared their financial reports for the last financial year.
According to the Insurance Act 2079, an insurance company must prepare and submit its financial audit report to the Nepal Insurance Authority within the first six months from the completion of a financial year. According to the official source, Himalayan General Insurance Company has prepared the audit report but has yet to submit it to the Authority for approval. The company is expected to submit it within Paush end of 2079.
According to the Companies Act, a public limited company must prepare an audit report and hold an annual general meeting within 6 months of the end of the financial year. But the insurance companies were violating the provision under the pretext of actuarial valuation. But with the consistent pressure from the regulatory authority, now most of the general insurers are able to submit their audit report within the given time frame.
As this act came into effect on 22 Kartik 2079, most of the insurance companies have requested the Authority to be flexible in the mandatory provision of the financial audit report submission time limit.
The audit of all life insurance companies, three general insurance companies, and state-owned reinsurer Nepal Reinsurance Company has not been prepared and submitted to the regulatory authority yet. Most of the life insurers have yet to submit their audit report for the previous financial year 2077-78. According to the Authority, Met Life, which was the first to submit the audit report of the previous financial year, has not yet submitted the last FY’s audit report.
Since the actuarial valuation of most life insurers is not ready yet, it seems that it will take some more time. But according to the Insurance Act, if the audit cannot be prepared by the end of Paush 2079, a fine of Rs. 25,000 per day will be slapped for the first week of Magh. If the payment is not made within the first week, then a fine of Rs. 50,000 per day will be paid till the second week of Magh. But if the financial statement is not submitted even within two weeks, a fine of Rs. 1 lakh per day has will be slapped on the insurer. If it is not possible even within the month of Magh, a fine of Rs. 18,50,000 is chargeable. From Magh onward, a fine of Rs. 30 lakhs fine has to be paid for each month.
