With the implementation of the Insurance Bill-2079, Beema Samiti has been transformed into Nepal Insurance Authority (Nepal Beema Pradhikaran). This new Insurance Act-2079 was approved by President Bidya Devi Bhandari on 23 Ashoj.
The insurance bill has been officially implemented on Tuesday, 31 days after the new Insurance Act-2079 was published in the Rajya Sabha. With the implementation of the Act, the committee was supposed to act as an authority. Now the authority will continue the work done by the committee and the authority will remain an autonomous organization with special powers.
It will do things like giving or revoking insurance licenses, how much capital will be created, etc. easily. Previously, the committee did not have such a right. As per the Insurance Act-2079, the committee has been transformed into 'Nepal Insurance Authority', the authority has formally started the work related to the regulation of insurance professionals from Tuesday.
Surya Prasad Silwal, chairman of the newly formed authority, said that with the implementation of the new Insurance Act, the authority has been made autonomous with more powers. According to him, the insurance development fund and the insurance interest protection fund will be established after the official operation of the authority.
Insurance Act-2079 provides that the Nepal Insurance Authority will remain the regulatory body of the insurance business and the authority will also act as an insurance advisor to the Government of Nepal. The Act has made the Nepal Insurance Authority autonomous with additional powers," the stakeholders said.
There is a legal system for the authority to carry out work such as determining the capital and capital fund related to the insurance business, taking necessary actions related to the risk reduction of the insurance business, promoting microfinance business to provide access to insurance to low-income groups, and coordinating with the provinces regarding insurance.
There is a legal provision that the funds received from the government, 50 percent of the microinsurance regulatory fee received by the authority from Bimak, at least 33 percent of the regulatory fee received by the authority from Bimak, and funds received from other sources will be in the fund.
Under the authority, there is a provision to have an insured interest protection fund. In the fund, there will be the amount set aside by the authority for that purpose, the amount determined by the insurer doing the life insurance business, and the amount accumulated in the unclaimed fund if the payment cannot be made under the life insurance policy.
The authority has the right to merge or merge insurers, transfer insurance business, authorize the authority to merge or merge insurers, acquire another insurer, suspend the license of such insurer or stop doing business and revoke the license if any insurer acts against the law.
Similarly, the law provides that the authority can establish an insurance information center to collect and organize information in the insurance sector, form an expert group to study and investigate claims related to fraud, fraud or fraud in the insurance business, and establish an insurance-related foundation for insurance-related training and research.
There is a legal arrangement that insurers can open branch offices within Nepal or abroad with the prior approval of the authority. The insurer has to arrange funds in the amount and ratio determined by the authority. Insurers must also maintain a separate mandatory reserve fund to carry out insurance business obligations.
The Act provides that insurers must keep a separate 'catastrophe fund' and establish a claim payment fund and a reserve fund to cover future losses due to catastrophes. There is a legal provision that the total assets of the insurer should exceed the total liabilities and at least 30 percent of the total issued capital should be set aside for sale to the general public.
There is a legal provision that does not allow anyone other than a licensed insurer to transact business related to insurance. It has been arranged that the authority should submit a report to the government within four months from the end of the financial year.
