Kathmandu. The corruption scandal that came to light after the arrest of businessman Dipak Bhatta in connection with the money laundering case has raised questions about the regulatory capacity of the Nepal Insurance Authority.
Himalayan Reinsurance, Himalayan Life Insurance, Crest Micro Life Insurance, Nepal Micro Insurance, Alliant Reinsurance Broker and Himalayan Investment Broker Capital have also been implicated in the money laundering and corruption case against Bhatta.
The Central Investigation Bureau (CIB) of Nepal Police has arrested former chairman of Himalayan Reinsurance Company Shekhar Golchha, former chairman of Himalayan Life Insurance company Sulav Agrawal, former chairman of Himalayan Life Insurance Rishiraj Mor and former chairman of Nepal Micro Insurance Ashish Shrestha in connection with the case. The Department of Money Laundering Investigation has also recorded the statement of Sahil Agrawal, the proprietor of Himalayan Rika.
An investigation involving a businessman and a Shankar group has exposed the fact that about half a dozen organizations that fall under the regulatory ambit of the Insurance Authority have been involved, which has exposed the fact that the authority has not been able to maintain corporate governance in the insurance sector.
Meanwhile, the Department of Money Laundering Investigation has issued a notice on Thursday asking the promoter shareholders of 7 micro insurance companies and Himalayan Reinsurance Company to buy shares at premium excluding face value. The department has asked the concerned documents to be present at the office within 15 days from the date of publication of the notice and submit the details.
After exposing the extreme irregularities in the insurance sector, the Insurance Authority has been training the employees of different departments of the insurance company every day to follow the rules and regulations. Most of the office-bearers, including the chairman of the NRA, have to give clarification to the Ministry of Finance.
It is the first responsibility of the authority to clarify whether the irregularities that have emerged now are only in one group of organizations or the entire insurance sector has been engulfed in the entire insurance sector. It is the responsibility of the NEA to ensure security of about Rs 4 trillion to the general public.
Even if the insurer is left to self-regulate, it is the responsibility of the Authority to monitor directly and indirectly through on-site and non-on-site supervision.
The current investigation revolves around the misuse of insurance company investments and reinsurance commissions. The NEA has put forward a provision for self-regulation by specifying the area and limit that insurers can invest without prior approval. However, the insurer should know in which area the insurer is investing in the project in which area.
The NEA’s Board of Directors, Executive Director and even the employees cannot escape by simply adding the phrase that the Board of Directors of the insurer will be themselves responsible in the directive or circular.
The tendency of the director to the chairman of the authority to approve the file for months when the insurer asks for any prior approval of the investment, to get stuck in the plow by losing the file and to approve the file even after the agreement was reached after the meeting outside the office, has seen the distortion in the insurance sector. It is not difficult to guess what was the effect of the out-of-office meeting and hospitality as the file was approved in the first place without addressing the issues on which the file is being held.
