June 24: The Insurance Board has fined 22 insurance companies for not submitting their audit reports. The board decided to slap fines ranging from Rs 10,000 to Rs 15,000 to such companies.
There is a legal provision that insurance companies have to submit the audit report to the board within 10 months after the end of each fiscal year. Accordingly, the insurance companies should have submitted the audit report of the previous fiscal year to the board by mid-April. However, 22 companies are yet to submit the reporst. Therefore, Rajuraman Poudel, the executive director of the board said that the board decided to make the companies pay a fine of Rs 10,000 each.
He said that an additional fine of Rs 5000 will be levied to the companies who did not submit the audit report on time in the fiscal year 2076/77 as well and proceeded to violate the rules this fiscal year as well.
Insurance companies are used to submitting the audit report late as the actuarial valuation needs to be done abroad. The board was lenient in this regard previously. However, it decided to fine the companies this time. Executive Director Poudel said that the companies have been fined as per the law.
“We have been forced to make such decision as the companies failed to submit their audit reports within the stipulated time. Although actions were taken in the past as well in the same regard, it was not strict,” he said.
The Insurance Act, 2049 BS stipulates that the audit report must be submitted to the board within 10 months of the end of each fiscal year with the provision that the board can take action if it is not submitted in time.
Among the insurance companies that failed to submit their audit reports for the fiscal year 2077/78 are Nepal Reinsurance Company, Life Insurance Corporation (Nepal), Asian Life Insurance Company, Surya Life Insurance Company, Prime Life Insurance Company, Jyoti Life Insurance Company, Reliance Life Insurance Company, Citizen Life Insurance Company, Prabhu Life Insurance Company and Mahalakshmi Life Insurance Company. Each of the companies have been fined Rs 10,000.
While on the other hand, Rastriya Beema Sansthan, National Life Insurance Company, Nepal Life Insurance Company, Gurans Life Insurance Company, IME Life Insurance Company, Union Life Insurance Company, Sun Nepal Life Insurance Company, Reliable Nepal Life Insurance Company, Sanima Life Insurance Company, Oriental Insurance Company, National Insurance Company have been fined Rs 15,000 each.