Kathmandu. The Nepal Insurance Authority, the supreme body regulating the insurance sector of Nepal, is currently in a dilemma of leadership and legal confusion. After the implementation of the Insurance Act, 2079, the dispute over the appointment of the chairman of the NEA, which should have been more powerful and autonomous, has been stuck in the court.
In recent times, the government has been sending joint secretary level employees from the Ministry of Finance and the Ministry of General Administration as the ‘so-called’ chairperson of the NRA. However, these employees have neither shown long-term policy courage nor have their decisions gained legal legitimacy. As a result, the entire insurance market has become like a ‘crow in the fog’.
Chairperson with court confusion and ‘kick out’
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The main link to this plight of the NRA is the appointment and dismissal of Sharad Ojha. The government had relieved Ojha of his post after the question of his qualifications was raised. However, the matter became more complicated when he went to court against his dismissal. The government faced legal complications to appoint a new chairman while the case was sub-judice at the Supreme Court.
The government has formed a committee to recommend a new chairperson, but the full-time leadership has not been able to come as the court process is yet to be finalized. Taking direct advantage of this, the government is running the NEA by sending the employees of the ministry to ‘work’.
The Legacy of the Three Presidents
If we look at the history of the NRA, the last three chairmen have been in the news more due to controversies than professionalism.
Chiranjivi Chapagain: His tenure is remembered for the chaotic beginning of ‘Corona Insurance’. The scheme, which was brought in the interest of a limited insurer, has dealt an irreparable financial blow to the non-life insurance sector. Not only that, the news that he had to pay an additional Rs 20 per share while issuing new licenses is another black spot in his tenure.
Surya Prasad Silwal: Silwal, who came after Chapagain, was also not untouched by controversies. He was accused of bullying a particular business house while distributing reinsurance and micro insurance licenses. He was acquitted by the Special Court at the end of his tenure but is now facing a review case at the Supreme Court. Instead of spending his retirement in rest, he is forced to go to court.
Sharad Ojha: After Silwal’s unexpected exit, Ojha had to face allegations of ‘incompetence’ before he could show his efficiency. In the first month of his term, he was removed from office by the government and knocked on the doors of the court. He was disqualified due to lack of work experience, but the Insurance Authority has not been able to find a chairman as per the provisions of the Act for a long time.
In September last year, the then government had directed not to allow Ojha to be present at the office. He then filed a contempt of court case against the then Finance Minister Rameshwor Khanal and the government. However, the case is sub judice.
Employees who have blocked files, insurers in confusion
In the absence of a full-time and empowered chairman, the employees of the NRA have also become defensive. Employees are afraid to forward long-term investment files. When the insurers go with the files, the only answer to the employees is, “It is better not to take such sensitive decisions until a new chairman comes.” ’
Insurance companies have not been able to get clear guidance as the regulatory body itself is unstable. The last blow of which is the general insured.
Experts in the insurance sector say that holding the regulator hostage due to political division and court maneuvering is detrimental to the country’s economy. Nepal’s insurance market will not be able to gain credibility until the authority gets competent and stable leadership. ’
As the newly elected government has completed the appointment of the vice-chairman and members of the National Planning Commission, the process of appointing the chairman of the NEA should also be taken forward and the insurance sector should be brought out of the situation of confusion soon.
