Kathmandu. The insurance sector, which is considered the backbone of any country’s financial security, has now become ‘guardianless’ in Nepal. The joint secretaries of various ministries sometimes hang on the chair of the Nepal Insurance Authority, but they are limited to ‘attending’ and running the day-to-day administration. The insurance market, which has invested billions of rupees, has now become a ‘crow in the fog’ in the absence of a full-time chairman who can lead with policy courage and long-term vision.
‘Negligence’ or ‘Mistake’ in the Making of the Act?
When the Insurance Act, 2079 was being implemented, many people thought that this sector would now gain a new momentum. However, while turning the pages of the Act, such serious holes have been found, which is surprising.
Section 11 of the Act talks about the appointment of the chairperson. But in one important aspect, it is completely silent. If the post of chairman falls vacant before the completion of the 4-year term, who will be the caretaker? The question of why the drafters of the Act ignored this or deliberately left the space vacant remains unanswered. However, taking advantage of this legal vacuum, the government is running the authority in ad-hocism. The NRA employees are also reluctant to forward the file for fear that the policy decisions made by the ‘caretaker’ leadership, which is not familiar with the Act, will last in the court tomorrow.
Section 19: President or ‘Omnipotence’?
Section 19 of the Act defines the functions, duties and powers of the Chairperson. But here, the chairman has been given so much ‘power’ that he can take unilateral decisions, overshadowing even the board of directors.
This unlimited authority has become the root cause of autocracy and opacity within the authority. It is not hidden from anyone that there have been many controversial games in the past from the distribution of licenses to the investment sector as the individual will of the chairman is more than the collective discretion of the board of directors. Clauses 10 and 12, which are called the test of qualifications and appointments, are now locked up in court dates and case files.
Court Confusion and Captive Market
The court tussle following the appointment and dismissal of Sharad Ojha left the NRA leaderless. Surya Prasad Silwal’s tenure before Ojha was also not untouched by controversies and allegations. Some were haunted by the wounds of ‘licensing’, while others were haunted by the tainted legacy of ‘inexperience’.
Today, the employees of the authority are confused. They tell the insurer, “Now it is going on, let’s not run big files by taking risks without a new and permanent chairman.” This has a direct impact on the business of insurance companies and the trust of the insured.
New Parliament and Act Amendments
The newly elected House of Representatives must now have the courage to get the insurance sector out of this coma. The government should abandon the policy of sending employees and amend the Act itself to make the executive and the powers of the chairman accountable to the board of directors.
The insurance sector has taken a fund of more than Rs 4 trillion earned by the common people. It is the responsibility of both the government and the regulator to protect and protect it. Therefore, only the employees employed by a ministry cannot always shape the future of a technical and sensitive sector like insurance. If the next parliament delays in correcting this ‘legislative error’, then this confusion in the insurance market is sure to cause great damage to the country’s economy.
