The board took the step on Sunday after the non-life insurance company failed to implement the directives issued by the insurance sector regulator. IB Spokesperson Raj Kumar Aryal said they halted the company’s transactions after it was found not implementing the directives of the board, besides being in poor financial condition.
This is the second time in the last 17 months the company faced IB action. Last year, the board had restricted the insurer’s business for a period between mid-July and mid-August. It lifted the ban on condition the company would improve its financial health. The board had also asked the company to carry out a due diligent audit (DDA) and report the regulator.
“However, the company could not improve its financial condition, besides failing to conduct the DDA. It was also found violating the Insurance Act 1992 and Insurance Regulation 1993,” said Aryal, adding the company has not also submitted its financial report for a long.
Most of executive members have left NB Insurance and its board is not in full capacity. Six board members, including the CEO, have already resigned, according the IB. “As a result, the company has failed to take any major decision,” said Aryal.
The IB said it took the step to safeguard the insured money of the general public. Aryal said they would develop a mechanism by forming a committee that would first look into the existing claims along with the ones that could arise in the future. The regulator has planned to carry out a DDA before taking a decision on the insurer’s future. “Only after conducting the DDA, we will decide on what to do next.”
According to Aryal, the IB has suspended the expenditure account of the insurer. Earlier, the IB had taken action against NB Insurance for not abiding by the law while paying house rent. The company has also been charged with investing rampantly without maintaining liquidity as per the law.- The Kathmandu Post
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