Kathmandu: Nepal Insurance Authority has approved the audit and financial statement of three life insurers for the last financial year 2078-79. According to the Authority, the financial reports of IME Life, MetLife Nepal Branch and Asian Life Insurance (ALICL) have been approved.
Among these three companies, IME Life Insurance Company is the first to get its financial audit report approved by the Authority. MetLife was the first company to submit an actuarial valuation and financial audit report of the last FY for approval from the Authority. But the approval of its financial report was delayed over delayed decisions on cash dividends distribution. Recently, the BODs of the Authority allowed MetLife to repatriate 20 percent of stock dividends to its US-based headquarters.
IME Life is in the process of issuing initial public offerings (IPOs) to raise paid-up capital. Its management is in preparation to issue the IPOs at a premium. The Authority has already allowed the insurer to issue IPOs at a premium price but final approval from the Stock Exchange Board of Nepal (SEBON) is yet to be received.
Similarly, the management of ALICL is also under the obligation to meet the deadlines for the minimum paid-up capital i.e. Rs.5 billion. Its current paid-up capital is Rs. 2.9 billion only. It seems a tough task ahead for the life insurer to arrange paid-up capital within the deadline given by the Insurance Authority.
In the current Insurance Act 2079, there is a provision that life insurance companies must prepare an audit report within 6 months of the end of the financial year. If the audit report is not prepared within 6 months, there is a provision to slap fines on the insurers.
Since the Insurance Act has been applicable only since Kartik 22,2079, the Authority has indicated to give an exemption to the insurers for this year.