Kathmandu. Last fiscal year 2081 within the stipulated time as per the regulatory provisions. Half of the insurance companies currently operating have failed to announce the annual general meeting of 82 years.
The insurers, who are in the process of approving both actuarial report and financial statement at the Nepal Insurance Authority, will now have to pay a penalty for not being able to hold the AGM within the stipulated time as per the provision of the Insurance Act, 2079. As per the Insurance Act, the insurer has to approve the annual financial report within 3 months of the completion of the fiscal year. According to the Companies Act, the date of the AGM with the agenda has to be announced at least 21 days in advance. However, a total of 18 insurers have called the AGM till December 26 while 16 companies including three government insurers have not been able to hold the AGM till mid-January.
There are 10 life insurers and 2 micro life insurers among the members who will call the AGM within mid-January after approving the financial details from the NEA. They are National Life Insurance, Prabhu Life Insurance, Surya Jyoti Life Insurance, Life Insurance Corporation, Reliable Nepal Life Insurance, Sun Nepal Life Insurance, Sanima Life Insurance, IME Life Insurance, Citizen Life Insurance, Liberty Micro Life Insurance and Guardian Micro Life Insurance of Nepal.
Similarly, there are 6 non-life insurers who will call the general public within mid-January. There are 5 non-life insurance companies and 1 micro non-life insurance company. NLG Insurance, Sagarmatha Lumbini Insurance, Nepal Insurance, Shikhar Insurance, Protective Micro Insurance, Sagarmatha Lumbini Insurance, and Sagarmatha Insurance.
The AGM includes three life insurance companies, one micro life insurance company, Oriental and National Insurance, seven non-life insurance companies and three micro life insurance companies.
Himalayan Life Insurance, Asian Life Insurance, Rastriya Life Insurance Company and Crest Micro Life Insurance are the life insurance companies that are yet to call for the AGM. Among the non-life insurance companies, Siddhartha Premier, Himalayan Everest Company, Neco, Rastriya Beema Company, United Ajod, Sanima GIC and Prabhu Insurance have not called the AGM.
Similarly, Himalayan Reinsurance Company and Nepal Reinsurance Company have also not been able to hold the AGM till mid-January.
MetLife has already approved the audit report of the last fiscal year from the Insurance Authority. However, since it is a branch office of a foreign insurer, MetLife does not have to hold its annual general meeting. Similarly, among the non-life insurers, Oriental Insurance and National Insurance, the branches of Indian insurers, are also not required to hold the AGM.
Clause 67 of the Companies Act, 2063 has a provision that a public company has to hold its AGM within six months of the end of each fiscal year. According to the provision of Section 87 of the Insurance Act, 2079, the insurer should complete the annual audit within 3 months of the completion of each fiscal year. If it is not within this time, the authority can extend it by 2 months. In this way, the Insurance Act has given only a time limit of 5 months i.e. till the end of November.
A public company failing to complete the AGM within the stipulated time will have to pay a fine to the Office of the Company Registrar, Securities Board of Nepal, Inland Revenue Office and Nepal Insurance Authority. Clause 138 of the Insurance Act, 2079 has a provision that if the report is not submitted within the stipulated time, it will have to pay a fine of Rs 25,000 per day for one week, Rs 60,000 per day for two weeks and Rs 100,000 per day after that.
Managing Director and Spokesperson of the Insurance Authority, Sushil Dev Subedi, said that the auditing evaluation of the insurance companies was encouraging. “After 33 years, the audit evaluation of so many insurance companies has been completed on time. ’
Subedi said that in the previous years, only 2-3 insurers were audited and evaluated on time. “This time, audit reports of half of the companies have been completed on time. This should be taken positively. ’
Subedi said that the audit reports of the remaining insurers are also being evaluated. “The NEA friends are working hard to complete this task,” he said.
