Financial Irregularities Raises Question on Audit of State-owned Insurer

Kathmandu: Although Finance Minister Bishnu Prasad Paudel has instructed state-owned insurers Rastriya Beema Sansthan and Rastriya Beema Company to complete their long pending financial audit within the next three months, it seems both companies will not be able to meet the deadline. Both state-owned insurance companies are yet to complete their financial audit from the financial year 2073-74.

Sansthan is the only state-owned life insurer while Company is the only state-owned general insurer. Both of these companies have not accomplished their financial audit from FY 2073-74 to 2078-79. These two companies are planning to conduct a joint AGM of FY 2073-74 to 2075-76 but still many jobs are pending. Some important documents and files are missing which has caused doubts about the financial health of these two companies. The Auditor General has also denied accepting any audit report in absence of evidence. Both companies have submitted the audit report for 2073-74 and 2074-75 but the Authority has raised questions on the actuarial valuation.

As per the provision of the Insurance Act 2079, state-owned Rastriya Beema Sansthan must be transformed into a limited company within 1 year from the execution of the Act. So, Sansthan(Corporation) must be transformed into a company by 22nd Kartik 2080. At present, the Government of Nepal holds 27.78 percent, Nepal Rastra Bank 55.55 percent, and Nepal Bank 16.67 percent stake in the Rastriya Beema Sansthan. Currently, the paid-up capital is Rs 99.5 million only.

On the other hand, the paid-up capital of the Rastriya Beema Company is Rs. 266.3 million only. In which the Government has the highest 47.5 percent stake. Employees Provident Fund holds 22 percent, Nepal Bank Limited has 10.96 percent and General Public has 19.54 percent stake.

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