Kathmandu. The Nepal Non-Life Insurance Professionals Association met with Insurance Authority Chairman Sharad Ojha today. A team of officials led by Association Chairman Rajendra Malla met the newly appointed Chairman of the Authority and expressed their congratulations and best wishes.
During the meeting with Chairman Ojha, the Association also drew attention to the policy difficulties seen in the non-life insurance business.
The Association drew the attention of the Authority to the provision that shares owned by directors in a company cannot be sold for 1 year even after resignation. The association says that the provision that a corporate director cannot buy or sell shares of the company concerned while in office or for one year after retiring from such office, as per Rule 38 (a) of the Securities Registration and Issuance Regulations 2079, is impractical.
A statement issued by the Non-Life Insurance Professionals Association said, “We would like to inform you that the provision regarding share sale is extremely impractical.” We would like to inform you that the directors, like all the shareholders in the company, are also investors and the arrangement of not being able to sell shares on the basis of being elected by the shareholders’ general meeting and being represented on their behalf in the board of directors is not fair.’ The team of officials including the president of the association has also urged the chairman of the Insurance Authority, Ojha, to correct the provision.
From the investment perspective, there is no difference between the financial interests of the company’s other shareholders and the financial interests of the directors, said the association’s president Malla. The association has stated that it is not fair to deprive the directors of the use of their investment in the company after the directors have invested in it like other shareholders. Chairman Malla said that in a situation where a businessman is not allowed to sell his movable assets, it will create obstacles in the diversification of his business, including essential household activities.
The statement issued by the association said, “We request that the provision that a person cannot buy or sell any type of shares of the same organization while he is in the position of a director and for one year after he leaves that position be amended to allow the sale of up to 50 percent of the share ownership while he is in the position of a director.”
The latest provision regarding share sale will create problems in the investment environment and will also affect foreign investment, according to Chairman Malla.
The Nepali reinsurance companies have been given The association has also drawn the attention of the Authority regarding the direct share. A statement issued by the Authority said, ‘Section 2 of the Insurance Act 2079 states that reinsurance means a contract entered into with an insurer whereby the reinsurer or another insurer bears the risk of a portion of the risk that is greater than the risk assumed by the insurer.
Similarly, the same provision has been made in Section 80 of the Act. On the other hand, based on the provision that reinsurance must be made with reinsurers established within the country in a percentage not less than the percentage specified by the Authority, there is a provision in force that two reinsurance companies established in the country should be allocated 6/6 percent direct share in the risk from the beginning. Since the provision is not in accordance with the spirit of the Act, the association has also drawn the attention of the Authority to make a provision to reinsurance only for the remaining risks other than the risks agreed to be assumed by the insurance companies as per the provisions of the Act. The meeting with the Chairman of the Insurance Authority, Chairman Malla, office bearers Azad Shrestha, Ramesh Niraula, Bal Krishna Shrestha and Kunal Kayal were present.
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