Kathmandu, July 22

The insurance sector regulatory body related bill titled ‘Bill for amendment and integration of insurance' submitted by Finance Minister Yubaraj Khatiwada in the Parliament has envisioned to reorganise the current structure of board of directors after the endorsement of the bill from the Parliament.

The chairman of the insurance board will be automatically removed if the bill is endorsed by the parliament without any changes. The bill has envisioned to transform current structure of Insurance Board as an authority.

The insurance sector regulator - Insurance Board - had proposed for the board to be given more autonomy and hence more authority. However, the Ministry of Finance has changed the provision of the initial draft bill submitted by the Insurance Board and reduced the authority of the regulatory body. “The Finance Ministry has tried to keep the insurance sector regulator as a division under its authority,” a highly placed source at the Insurance Board told The Himalayan Times.

Along with reducing the authority and instead of providing more autonomy to the regulator, Ministry of Finance has included the provision to remove incumbent chairman of the board. Normally, the government does not sack the chiefs of the regulatory bodies but the new bill on insurance sector regulation has brought the provision to remove the chairman of the Insurance Board along with the passage of the bill.

Insurance Board Chairman Chiranjibi Chapagain was appointed two years back. The current act allows him to serve for the next two years and the government can extend the tenure of chairman for another one year based on the performance.

The bill submitted in the Parliament has stated that after the enforcement of this act the board of directors will be reorganised as per this new act but the employees of the Insurance Board will automatically be employees of the proposed Nepal Insurance Authority. The board of directors of the authority will comprise of a chairperson appointed by the government, joint secretaries from the Finance Ministry and Ministry of Law, Justice and Parliamentary Affairs, and two experts each from life insurance and non-life insurance sector based on their expertise.

Meanwhile, for the appointment of the chairman of the authority, a committee led by the finance minister and comprising a former secretary of Finance Ministry or a former chairman of the Insurance Board and one expert appointed by the Finance Ministry will recommend the name of the chairman to the Cabinet, as per the bill submitted to the Parliament.