Kathmandu. The chief executive officers of insurance companies have again requested the Insurance Authority of Nepal to postpone the implementation of NFRS 17 (National Accounting Standard 17). In a meeting held at the Authority on Wednesday, representatives of the Life Insurance Association made this request to the Authority leadership.
The association has requested the NRA to extend the deadline for implementation by at least two years. In the meeting attended by NRA Chairperson Chandrakala Poudel, Executive Director Sushil Dev Subedi, representatives of the Board of Accountants and Chartered Accountants Association of Nepal (ICAN), the insurer requested to extend the deadline citing technical difficulties and lack of manpower.
According to the insurer, the required manpower is not available for the implementation of NFRS 17 in Nepal. The last fiscal year 2082. They say that they have not been prepared for 83.
According to sub-section (2) of Section 84 of the Insurance Act, 2079, the insurer has to submit the financial statement to the authority for approval by the end of January. For the approval of the financial statement of 83, the insurer has to submit the financial statement to the authority for approval by the end of January. Before that, the actuarial evaluation report has to be approved. According to the authority, so far, only 2 actuarial reports have been approved. Other insurers have not yet been able to submit the actuarial report for approval.
FY 2081. The authority had also fined some insurers at the rate of Rs 2 lakh in the last financial year for delaying the submission of the financial report of 82. Since two years ago, the authority has been pushing back the deadline for implementation of NFRS 17, so this time the authority does not intend to push back. The regulator believes that if it is pushed back once, the implementation will be delayed for another 4-5 years.
Executive Director of Nepal Insurance Authority Sushil Dev Subedi said that the implementation of NFRS will benefit the insured the most, explaining the reason for the implementation of NFRS.
Nepal is the second country in South Asia to implement the provision of risk-based capital (RBC) after Sri Lanka. Apart from this, the Risk-Based Regulatory Oversight System (RBS) has also been implemented in Nepal. With the implementation of NFRS 17 now, Nepal will be the first South Asian country to implement FRS as per international standards.
Neighboring India has not yet implemented RBC. It is still under consultation. Apart from this, India has not implemented the Indian National Accounting Standards like NFRS 17 according to the International Accounting Standards. The insurers have also expressed dissatisfaction that the Authority is in a hurry to implement the new accounting standards in Nepal even when there are enough actuaries and chartered accountants available in India.
“How we can make our insurance companies transparent and financially strong is more important than what our neighbors have not done,” said Subedi, executive director of NEA, “Now neighboring countries are trying to learn from our experience of RBC, which is a positive aspect for us.”
