Kathmandu: Nepal Insurance Authority has instructed Kamlesh Kumar Agarwal, a member of the Board of Directors(BODs) of Nepal Life Insurance Company, to resign from BODs. The Authority ordered Agrawal and his son Jayant Kumar Agrawal, a member of BODs of Surya Jyoti Life Insurance to resign over violation of the provisions of the Insurance Act 2079.
Surya Prasad Silwal, chairman of the Authority has confirmed that his office has already instructed for the resignation of either one of them. According to Clause 47 of the Insurance Act 2079, members of the same family cannot join the Board of Directors of different insurers having the same business nature.
Kamalesh Kumar Agrawal has repeatedly represented both public and promoters shareholders groups in the BODs of Nepal Life Insurance which is against the interest of the public shareholders. He has occupied the BODs for more than four terms. The Corporate Governance Directives for Insurers 2075 has the provision that an individual can not enjoy more than two terms in the BODs of insurers. Further, the independent director cannot join the BODs of an insurer for more than one term.
Similarly, the Authority instructed Nepal Insurance Company to dismiss BODs Chairman Arjun Sharma Paudel and Director Bishnu Khaitan Agarwal. The Authority had given consent for the reappointment of the duos on the conditions for reaching mergers with any other general insurers. But Nepal Insurance Company has not reached an agreement for mergers with any of the general insurers. As per the Corporate Governance Directives 2075, the tenure of the duos is already over. The Directives on Merger and Acquisition of the Insurers allow the members of BODs to enjoy extended tenure in case of mergers or acquisitions.
