Kathmandu. According to the Corporate Good Governance Directive of the Insurer, 2080, the post of Chief Executive of the Insurer should be appointed within 3 months from the date of the vacancy.
Sub-Directive 11 of Directive 25 of the Directive states that the post of Chief Executive Officer of the insurer should not be kept vacant for more than 3 months. The Authority is also responsible for the implementation of this directive issued by the Board of Directors of the Nepal Insurance Authority.
Not only the Institutional Good Governance Directive, but the Labour Act, 2074 also provides for how long an organized organization can remain without a Chief Executive Officer (CEO). Sub-section 134 (6) of the Labour Act provides that the employer can terminate the services of such a worker if the suspension period under sub-section (1) is more than 90 days, except when the employer himself is in detention by filing a complaint or complaint. In this way, while terminating the service, the employer does not have to give the concerned worker an opportunity of being heard.
Although both the Labor Act and the directive issued by the Insurance Authority have a clear provision regarding the vacancy of the post of Chief Executive Officer, 7 insurance companies including two reinsurance companies have not had a CEO for more than three months.
Despite the clear legal provisions, the Insurance Authority has not shown interest in implementing such provisions.
The chief executive officers of Nepal Reinsurance Company and Himalayan Reinsurance are now facing legal charges with suspension. Himalayan Life Insurance is also without a chief executive. Micro insurance companies like Crest Micro Life, Nepal Micro, Liberty Micro Life, Protective Micro and Guardian Micro Life Insurance are also without CEOs.
The Chief Executive Officer (CEO) appointment process has been put on hold by the Supreme Court’s order after the company published an advertisement for the appointment of the Chief Executive Officer of Himalayan Life Insurance. More than one case against the accused CEO is pending in the court. During the preliminary hearing, the court ordered his release on bail in one of the cases, but in other cases, he has been kept in custody for trial.
The CEOs of these nine insurance companies have been suspended since June 28 after they were indicted in the money laundering, insurance fraud, banking fraud and securities related offences related to the promoters and directors of Himalayan Reinsurance. Some of them are still in custody for trial.
