Kathmandu: The Board of Directors or officials of insurance companies will no longer get excuses to shift penalties to the account of their company for delayed submission of reports, information, and meeting regulatory compliances as per the Company Act. The Office of the Company Registrar (OCR) instructed the Nepal Chartered Accountants Organization ‘ICAN’ to make sure that any penalties slapped against the delays must be paid by the concerned member of BODs or the officials themselves.
A letter issued to the ICAN on Wednesday reads that, according to the provisions of Section 81(2) of the Company Act, a fine will be slapped in event of failure to provide details, information, or replies to the office within the stipulated time. The responsibility to pay the fine rests with the director of the company or its concerned officials. Such fines may have been incurred in the account of the company without being borne by the directors or officers of the company. So, ICAN must instruct its members to carefully check and avoid such events while conducting the financial audits of their client organizations.
ICAN is the regulatory organization of the chartered accountants of Nepal.
The recently executed Insurance Act 2079 has the provision to slap millions of penalties on the insurers in the event of failure to meet regulatory compliance. In recent days it has been witnessed that insurers make unnecessary delays in the completion of their actuarial valuation and financial report preparation.