chhatramani/Nepal-Legal-Text-Corpus-44laws huggingface dataset:
Insurance Act 2079

Chapter-2 Establishment of Authority and Its Functions, Duties and Power

Section 15: Non-abuse of regulatory opportunity
1) The Chairperson, Member of the Committee, Authority employee, or Auditor shall not disclose any information that has come to their knowledge while performing their duties in their official capacity, whether or not it has been made public and is required to be kept confidential according to law, to any person other than the person concerned or disclose its source.
2) The official referred to in sub-section (1) shall not use or cause to be used any confidential information that comes to his knowledge while performing his duties in his official capacity for the benefit, interest or advantage of himself or any member of his immediate family.
3) The Chairperson of the Committee, member, employee of the Authority, auditor, representative or any person working under any contract with the Authority, firm or company shall not, while performing any work on behalf of the Authority, exercise the regulatory authority of the Authority and receive or give any benefit, facility, concession or advantage to himself, his immediate family or any other person.
4) If any work is done in a manner contrary to this Section, the concerned official shall be deemed to have abused his authority in accordance with the prevailing law, and information thereof shall be sent in writing to the concerned body.

Insurance Act 2079

Chapter-2 Establishment of Authority and Its Functions, Duties and Power

Section 16: Meeting of the Board
1) The board’s meeting shall be held, as necessary, at least once every month.
2) The meeting of the board shall be held on such date, time and place as may be prescribed by the Chairperson.
If at least three members of the Board request in writing to convene a meeting, the chairperson or, in his absence, the senior most member shall convene a meeting of the Board within 7 days.
3) The board secretary shall make the agendas available for discussion to the members at least 24 hours before the meeting.
4) The presence of more than fifty percent of total members of the board shall be deemed to constitute a quorum for a board meeting.
5) The board meeting shall be presided over by the chairperson and by the senior most member in his/her absence.
6) The majority of opinions at the board meeting shall be deemed to be the decision of the board, and in the case of a tie, the person presiding over the meeting shall exercise a casting vote.
7) The board may, if deemed appropriate, invite any expert or officials in the related field to attend a meeting as an observer.
8) Minutes regarding agendas discussed and decided over shall be recorded in a separate book, and such minutes shall be signed by the chairperson as swell as the members of the board attending the meeting.
9) The decision of the board must be certified by the board secretary.
10) Other rules of procedures relating to the board meeting shall be determined by the board itself.
Insurance Act 2079

Chapter-2 Establishment of Authority and Its Functions, Duties and Power

Section17: Restrictions on decision-making in cases of conflict of interest
1) Where any proposal in which the chairperson or members or any of their family members or any member has direct or indirect financial or personal or professional interest is to be discussed at
the meeting of the Board, such person shall give information as to such interest to the Board prior to the commencement of discussion on such matter.
2) In accordance with sub-section (1), such person shall not be entitled to participate in the discussion and decision of such a matter in which such person has any direct or indirect financial or personal or professional interest.
3) A decision made contrary to sub-section (1) or (2) shall not apply to such a member.

Insurance Act 2079

Chapter-2 Establishment of Authority and Its Functions, Duties and Power

Section 18: Committees and Sub-Committees may be formed
1) The board may, as per this act or rules and regulations made thereunder, form any committee or sub-committee, as per necessity, for the operation of its business.
2) According to sub-section (1), functions, duties, powers, terms of reference, facilities allowances and procedures of the committee or subcommittee, as the case may be, shall be as prescribed.

Insurance Act 2079

Chapter-2 Establishment of Authority and Its Functions, Duties and Power

Section 19: Provision related to Employee
1) The Nepal Insurance Authority shall have such numbers of employees as may be necessary for the efficient operation of the functions of the Authority.
2) The appointment, remuneration, facilities and terms and conditions of service of the employees of the Authority shall be as prescribed.
3) While adding the number of employees or adding facilities and terms and conditions of service of the employees, prior permission from the Ministry shall be obtained
Insurance Act 2079

Chapter-3 Fund, Accounts and Audit of the Authority

Section 20: Fund of the Insurance Authority
1) The Authority shall have a separate fund of its own.
2) The following amounts shall be credited to the fund as referred to in sub-section 1:
(a) Amounts received from the Government of Nepal,
(b) Amounts received by way of fees from incorporation, prior approval, and licensing of insurance companies,
(c) Amounts received by way of fees from licensing or renewal of insurance intermediaries,
(d) Amounts received by way of the fees for regulatory functions of the authority,
(e) Amounts received from foreign governments, international organisations, institutions or bodies,
(f) Amounts received from any other sources.
3) The approval of the Ministry of Finance shall be obtained in receiving any amount from the government, international organisations, institutions or bodies referred to in clause (e) of sub-section (2).
4) All amounts to be obtained to the fund of the Authority pursuant to sub-section (2) shall be credited to an account to be opened with a licensed bank or financial institution.
5) The expenditures to be made on behalf of the Authority shall be charged to the fund as referred to in sub-section (1).
6) Out of the amounts deposited in the fund maintained as per this section, fifty percent of the amount remaining from the fund after deducting amounts allocated by the authority for operation, management and development of the insurance sector to be used by the authority per year, shall be deposited in provincial reserve fund every year.
7) Other provisions related to the operation of the fund pursuant to sub-section (1) shall be as prescribed.

Insurance Act 2079

Chapter-3 Fund, Accounts and Audit of the Authority

Section 21: Accounting of Income and Expenditure
1) The Authority shall maintain its accounting details, books of accounts and financial statements so as to truly reflect its financial position, as per prevailing Nepal Accounting Standards.
2) The authority shall maintain an internal control system as prescribed for the operation of its activities.

Insurance Act 2079

Chapter-3 Fund, Accounts and Audit of the Authority

Section 22: Audit
1) The accounts and books of the Authority shall be Audited by the Auditor General.
2) The authority shall conduct its internal audit regularly.

Insurance Act 2079

Chapter-3 Fund, Accounts and Audit of the Authority

Section 23: Audit Committee
1) The Board shall form an audit committee, making the committee accountable to the board itself, which shall consist of following members:
(a)
One director appointed by the board
Convener
(b)
Expert on the concerned subject nominated by the board
Member
2) The Head of Internal Audit Department of the authority shall act as Secretary to the Audit committee.
3)  The functions, duties and powers of the Audit Committee shall be as prescribed in sub-section (1).
Insurance Act 2079

Chapter-4 Provision Regarding License

Section 24: Restriction on Insurance Business without license
1) No person shall without obtaining license as per this act, carry out or cause to do directly or indirectly, any insurance transactions, business with or without using the name like insurance, re-reinsurance or insurance fund.
2) No person shall use the words insurance, reinsurance, or insurance fund in the name of their firm or company while carrying out any insurance transactions or business or for any other purpose in contravention of sub-section (1).
3) No person shall operate or cause to operate any transaction relating to the insurance business with other person or corporate body other than the insurer licensed under this Act.

Insurance Act 2079

Chapter-4 Provision Regarding License

Section 25: Incorporation of Insurance Company
1) Any person who is desirous of undertaking an insurance business according to this Act shall have to incorporate it by getting such insurance business registered as a public limited company in accordance with the prevailing laws.
2) Notwithstanding anything contained in sub-section (1), provided that the insurance companies that have already been incorporated and are in operation during the commencement of this Act are not required to be incorporated.
3) Any person or his family members or a corporate body in which he or his family members have a substantial interest shall not invest more than 15% of the paid-up share capital of the insurance company to be incorporated under this section.
However, it shall not be applicable in case of shares subscribed by the Government of Nepal, Province Government or Foreign Investors.
4) Any person or entity holding shares of insurance companies in limits more than prescribed under sub-section 3, such person shall, within 2 years from the commencement of this Act, maintain the share investment within specified limits.
5) While investing in other insurance companies by any person or their family member, firm, company or institution having investment in one insurance company pursuant to sub-section (3), investment shall have to be made subject to be less than one percent of the paid-up capital of said insurance companies.
Insurance Act 2079

Chapter-4 Provision Regarding License

Section 27: Power to Refuse Prior Approval
1) Notwithstanding anything mentioned in Section 25, the Insurance authority may refuse to issue prior approval to incorporate an insurance business or open a branch in Nepal by a Foreign  insurance company in the following circumstances:
(a) If the name of the proposed insurance company is similar to the name of any previously registered insurance company.
(b) If the name of the proposed insurance company or the activities of the insurer to be carried out are found to be inappropriate or prejudicial to the public interest, good conduct, religion, ethnicity, community or traditional belief.
(c) If based on a study of the feasibility report, details, and documents, other infrastructures submitted by the proposed insurer do not provide grounds to believe that it may carry on insurance transactions in a healthy and competitive manner.
(d) If the objective of the proposed insurance company is contrary to the prevailing laws.
(e) If documents and details as provided in section 26 is not submitted.
(f) If every promoter does not undertake to subscribe to at least TEN THOUSAND shares in the proposed insurance company or if the details about the shares to be conducted are not clearly businesses in addition to the disclosed.
(g) If the proposed insurance company has not proposed to maintain share capital as per Section 36.
(h) If any of the proper has been convicted and sentenced of any offence involving insurance, banking, finance, fraud, forgery, money laundering, corruption, human trafficking, kidnapping, hostage or other similar offences involving moral turpitude and a period of 5 years has not lapsed after serving such punishment.
(i) If the proposed insurance company has included objectives of other business in addition to insurance business.
(j) If the prior approval is not to be granted as per Section 31 of the Act.
(k) If any other promoters or his family members had been blocked as per prevailing acts and three years have not lapsed after removal from such blocklist.
(l) If it is found that an investment in the proposed insurer by the single promoter or his family members or corporate body or group is fifteen percent or more of the paid-up capital.
However, this provision shall not be applicable to the shares held by the Government of Nepal or province Government or Foreign Investors.
(m) If the person or his family member is a substantial shareholder in another insurance company undertaking a similar insurance business as proposed by the insurer.
2) Notwithstanding anything mentioned in sub-section (1), the Nepal Insurance Authority shall not grant prior approval to undertake more than one insurance business at a time except for the reinsurance business.
3) In case when the Nepal Insurance Authority had denied to grant prior approval, the applicant shall be provided with reasons of refusal, in writing, within 60 days from the date of application.
Insurance Act 2079

Chapter-4 Provision Regarding License

Section 28: Application to be made
1) Any person who had obtained prior approval as per section 26 and is registered as a company as per prevailing acts, desires to undertake insurance business, shall submit an application to the Nepal Insurance Authority along with following details and documents:
(a) Prior approval was granted by the authority to incorporate the insurance company. approval was
(b) Registration Certificate of the Incorporated insurance company.
(c) Copy of memorandum of association and articles of association of the insurance company.
(d) If the promoter of an insurance company is any company or corporate body, a copy of the previous three year’s audited financial statements and evidence of tax clearance.
(e) If promoter of insurance company is any company or corporate body, name of substantial shareholders and details about their family members.
(f) the type of insurance business to be undertaken by the insurance company.
(g) A portfolio of the insurance business is to be undertaken by the insurance company. The insurance company is to undertake a portfolio of the business
(h) Particulars of an office building equipped with all infrastructures required by the insurer to carry on financial transactions or,   if such building is to be rented, a copy of the lease agreement and the particulars of the building to be rented, including that there are enough bases of making available insurance services and facilities
(i) Personal details of Chief Executive Officer and Other managerial level officers.
(j) Documents relating to Risk Management System.
(k) Details about investment policies, risk calculation, claims, reinsurance and information technology.
(l) proposed insurance contract and in case of reinsurance company proposed reinsurance contract.
(m) Document evidencing that the amount of the shares undertaken to be subscribed by promoters is paid and deposited.
(n) Details about organisational structure.
(o) Employees’ terms, conditions and facilities by-laws along with their remuneration.
(p) Financial, administration and procurement by laws.
(q) Other details or documents as specified by the Nepal Insurance Authority.
2) While applying for undertaking insurance business by any branch office of a foreign insurer, it shall provide the following details in addition to those matters mentioned in sub-section (1).
(a) Letter of Consent or approval given by the government of the concerned country or regulatory authority formed according to the laws of the concerned country of the foreign insurer for operating insurance transactions in Nepal by such foreign insurer.
(b) Registration Certificate of Branch registered in Nepal.
(c) Upon obtaining prior approval from Nepal Insurance Authority, if any details and comments submitted under Section 26 are altered, details about such along with a copy of such documents.
(d) Other details or documents as specified by the Nepal Insurance Authority.
Insurance Act 2079

Chapter-4 Provision Regarding License

Section 29: Granting License
1) In case the Nepal Insurance Authority, upon examination of the application under Section 28 and the documents enclosed therewith, finds that the applicant is capable of operating an insurance business, after collecting prescribed fees, issue a license within 60 days from the date of receipt of application.
2) While granting license as per sub section (1), the Nepal Insurance Authority shall clearly specify the type of insurance business that can be undertaken by the insurers pursuant to Section 61.
3) Unless any date is mentioned from which the license shall be effective, any issued license under sub-section (1) shall be effective from the date of issuance of such license.
4) The Nepal Insurance Authority may while granting license specify necessary terms and conditions by giving due consideration to the existing position of the insurance company and interest of the insured.
5) Notwithstanding anything mentioned in sub-section (4), the Nepal Insurance Authority may alter the terms and conditions to be complied with by the insurer while undertaking the insurance business by issuing directives under this act.
6) It shall be the duty of the concerned insurer to abide by such terms and conditions prescribed in sub-sections (4) and (5).
7) The license issued under this section to the Section to the Section insured under this section insured shall not be transferred.
8) Notwithstanding anything contained elsewhere in this Section 34, if the applicant had not submitted the required details and documents as per section 28 or If the infrastructure to operate insurance transactions is not adequate or due to any reasons if the Nepal Insurance Authority thinks that it is not reasonable and appropriate to issue license for operation of insurance transactions for protection of interests of insured, the Nepal Insurance Authority may deny to issue license to operate insurance transactions and in case when the Nepal Insurance Authority had denied to grant license, the applicant shall be provided with reasons of refusal, in writing, within 60 days from the date of application.

Insurance Act 2079

Chapter-4 Provision Regarding License

Section 30: Commencement of Insurance Business
1) The insurer shall commence its insurance business within 6 months from the date of obtaining the license.
2) If the insurer cannot commence its business within the period specified in sub-section (1), the insurer may submit an application along with reasons to the Authority before the expiry of such period.
3) On examination of an application received as per sub-section (2), if the authority finds it reasonable, the authority may grant an extension of a further six months.
4) The concerned insurer shall commence its insurance business within six months and provide information to the authority as per sub-section (2).
5) The authority can cancel the license of the concerned insurer if such an insurer cannot commence its business even within the extended period sub-section (2).
Insurance Act 2079

Chapter-4 Provision Regarding License

Section 31: Refusal for Prior Approval and License
Notwithstanding anything mentioned elsewhere in this act, on the basis of market survey, study and analysis, the Nepal Insurance Authority may, by specifying a certain period, prohibit to issue prior approval pursuant to section 26 to incorporate an insurance company or open a branch by foreign insurance company or prohibit to issue a license under section 29.

Insurance Act 2079

Chapter-4 Provision Regarding License

Section 32: Can open a branch office
The insurer may, by obtaining prior approval from the Nepal Insurance Authority, open a branch in Nepal or outside Nepal as prescribed.

Insurance Act 2079

Chapter-4 Provision Regarding License

Section 33: Can open a liaison office
1) Any foreign insurer may open a liaison (contact) office in Nepal after obtaining prior approval from the Nepal Insurance Authority.
Provided that such liaison office shall not undertake insurance business.
2) Other arrangements regarding the liaison office of foreign insurance companies shall be as prescribed.

Insurance Act 2079

Chapter-4 Provision Regarding License

Section 34: Cancellation of License
1) If an insurer desires to cancel the license of any insurance business (Portfolio) that it has been carrying out, it shall apply to the Nepal Insurance Authority.
Provided that an insurer cannot apply for the cancellation Portfolio of all types of insurance business at once.
2) If the authority upon examination of the application under sub-section 1, the authority if it, upon examination of the application under sub-section 1, the authority, if it deems it appropriate, shall cancel the license of one or more portfolios deems appropriate, shall cancel the license of one or more portfolio of a particular insurer.
3) Other provisions regarding the cancellation of the portfolio license under this section will be as prescribed.

Insurance Act 2079

Chapter-4 Provision Regarding License

Section 35: List to be Published
1) The Nepal Insurance Authority shall publish an updated list of licensed insurers every three months in at least two national-level daily newspapers and on its website.
2) The published list shall include the date of commencement of the insurance business, paid-up capital, insurance charges, claims and other details as deemed necessary by the Authority in accordance with sub-section (1).
Insurance Act 2079

Chapter-5 Provision on Capital Fund and Shares Allotment of Insurer

Section 36: Paid Up Capital of the Insurer
1) The minimum paid-up capital of the insurer shall be as prescribed by the Nepal Insurance Authority from time to time.
2) Notwithstanding anything mentioned in sub-section (1), on the basis of the financial or capital market of the country, liabilities of the insurer or the financial position of insurers, the Nepal Insurance Authority may give orders to increase the paid-up capital by prescribing a time limit.
3) On receipt of an order pursuant to sub-section (2), the insurers must fulfil the minimum paid-up capital within the time frame set by the Nepal Insurance Authority.
4) The Nepal Insurance Authority may cancel the license of insurers failing to maintain the paid-up capital as per sub-section (1) or (2).
5) Other provisions relating to capital of insurers shall be as prescribed.

Insurance Act 2079

Chapter-5 Provision on Capital Fund and Shares Allotment of Insurer

Section 37: May order capital reduction
1) Notwithstanding anything in the prevailing laws, the Authority may order the insurer’s paid-up capital reduced under the following circumstances.
(a) If the license of any insurance business (portfolio) that the insurer had been carrying out has been cancelled.
(b)  If the insurer is rendered problematic pursuant to Section 101.
2) The paid-up capital of the insurer shall not be decreased below the limit prescribed by sub-section (1) of section 36.

Insurance Act 2079

Chapter-5 Provision on Capital Fund and Shares Allotment of Insurer

Section 38: Insurance Fund
1) The Insurer shall maintain an insurance fund in the quantity and ratio prescribed by the Nepal Insurance Authority.
2) The Insurer shall maintain separate funds for each category (Portfolio) of the Insurance Business and the amount to be received from each Insurance Business shall be deposited in the concerned fund.
3) The fund maintained for one category (Portfolio) of Insurance Business shall not be deposited or utilised to bear the liabilities relating to another category (Portfolio) of Insurance Business.