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

Chapter- 13 Problematic Insurer

Section 109: Provisions to be made in Case improvement Not Achieved in the Condition of the Insurer
If it is felt that improvement is not achieved in the condition of the Insurer taken under the control by the Special Administration Team, it may take the following actions:
(a) To transfer the forfeited shares by selling the same in auction within the time prescribed,
(b) To recommend to the Authority to merge the insurer into another insurer within the time prescribed,
(c) To recommend to the Authority to cancel the license of the insurer by handing over the insurance business of another insurer,
(d) To recommend to the Authority to make improvements in the condition of the insurer pursuant to Section 110,
(e) To recommend to the Authority to initiate the process of insolvency of the insurer.

Insurance Act 2079

Chapter- 13 Problematic Insurer

Section 110: Recommendation for Improving Financial Condition of the Insurer
1) If it is observed that there is possibility of causing negative effect to the overall insurance sector while advancing the process pursuant to clauses (a), (b), (c) or (d) of Section 109 due to not achieving the improvement of the insurer taken into control under Section 102, the special management team shall mention this information and prepare a report incorporating the position of the assets and liabilities of the insurer to prevent to creating such situation ad shall submit the report to the Authority.
2) After receiving the report pursuant to sub-section (1), if a negative effect is seen to occur in the entire insurance sector while carrying out management or resolution of such Insurer, and if it is seen that financial condition can be improved if the Government of Nepal invests in such Insurer, the Authority shall recommend such description, along with its opinion, to the Ministry of Finance.
3) In case the recommendation is received pursuant to sub-section (2), the Ministry of Finance may make an investment in share ownership of the insurer to improve the financial position of the Insurer.
4) In accordance with sub-section (3), the Ministry may sell its investment of share ownership through bidding within five years after the achievement of improvement in the financial position of the Insurer.
Insurance Act 2079

Chapter- 13 Problematic Insurer

Section 111: Other Provisions Regarding Special Management of The Insurer
1) No one is supposed to bar, obstruct, interrupt or interfere or get the right to access and control of the Special Administration Team barred, obstructed, interrupted or interfered.
2) If anyone does or causes anyone to do anything contrary to sub-section (1), the Special Administration Team may request work committed by the administration or the police concerned for necessary help.
3) If a request is made pursuant to sub-section (2), the body concerned shall have to help to maintain access and control of the Special Administration Team upon the office, property, record, and account book and information technology system by managing essential security.
4) The person being aggrieved with loss by the activities of the Special Administration Team or the Authority under this Chapter may file a petition to the High Court within 60 days from the date of submission of the report by the Special Administration Team to the Authority or in case of dissolution of the team, within sixty days from the date of dissolution.
5) The High Court may provide reasonable financial compensation to the aggrieved party in the following conditions:
(a) Any actions performed beyond the authority during the course of management of the insurer taken into control,
(b) Not completing the settlement process pursuant to this Act,
(c) Performing managerial action of the insurer taken into control without reason sufficient base & reason.
6) The Special Administration Team shall practice the authority in a transparent and justifiable way so as to safeguard the interest of the concerned insured and other concerned parties.
7) Notwithstanding anything contained in the prevailing laws, the insured, shareholders or creditors shall not be allowed to file a case against the works performed by the directors and officials of the concerned insurer to facilitate the management process of the insurer taken under control by the Authority or in the course of implementation of a decision of Special Administration Team.

Insurance Act 2079

Chapter- 13 Problematic Insurer

Section 112: Final Report to be Submitted
In regard to the insurer taken into the control of the SAT, the team shall submit the final report to the Authority, incorporating the prescribed information regarding the activities performed by it, within thirty days from the date of completion of works to be done pursuant to this Act or completion of its tenure or, in case of dissolution of the team by any reason, within 30 days from the date of dissolution.
Insurance Act 2079

Chapter- 14 Transfer of Insurance Business and Merger of Insurer

Section 113: Insurance Business May Be Transferred
1) Out of insurance business being performed by any insurer, entire or partial portfolio of insurance business may be handed over to another insurer performing the insurance business of same portfolio by receiving an approval from the Authority.
2) If any insurer desires to take or hand over the insurance business pursuant to sub-section (1), the concerned insurers shall pass the special resolution in their respective General meetings, make a mutual agreement, and submit a joint application to the Authority along with documents as prescribed.
3) The Authority may grant approval as prescribed according to the agreement if it concludes that the transfer of insurance business is reasonable while investigating the application and comprehending additional matters if required pursuant to sub-section (2).
4) Notwithstanding anything contained in sub-section (3), the Authority shall not grant approval to take or hand over the insurance business if it seems possible to cause detriment or loss to the insured, increase unhealthy competition in the insurance business or establish a monopoly or controlled commercial practice.
5) After the assignment of the insurance business pursuant to sub-section (3), obtaining approval for assigning from Nepal Insurance Authority, the assets and liabilities of such insurer shall be transferred to the insurer which takes over the insurance business by assignment.
6) Other provisions concerning with assignment of insurance business shall be as prescribed.
Insurance Act 2079

Chapter- 14 Transfer of Insurance Business and Merger of Insurer

Section 114: Insurer May Merge or be Amalgamated
1) Insurers engaged in the same type of insurance business may merge or be amalgamated with each other in accordance with the prevailing law with the approval of the Authority.
2) Before initiating the merger or amalgamation proceedings pursuant to sub-section (1), both the merging and the merging insurers shall submit a joint application to the Authority for approval along with the prescribed documents.
3) While investigating upon the application pursuant to sub-section (2), if it is observed as reasonable to merge or to be merged for the insurers, the Authority shall grant theoretical approval (approval in principle) to commence the process of merging.
4) After receiving in-principle approval pursuant to sub-section (3), the merging or merging insurers shall appoint a person qualified to be an auditor of the insurer to evaluate the assets, liabilities and business of their respective companies and have the valuation conducted as prescribed and submit an application to the Authority along with the details.
5) The Authority may grant approval for a merger (to merge or be merged) if it is observed that the merger is reasonable to the applicant insurers while investigating the application received pursuant to sub-section (4) and comprehending additional matters if it required so.
Provided that the Authority shall not provide approval to the insurers to merge or to be merged if there seems the possibility of causing detriment or loss to the insured, increasing unhealthy competition in the insurance business or establishment of monopoly or controlled commercial practice if insurers amalgamated together.
6) Other provisions relating to merging together (to merge or to be amalgamated) of insurers shall be as prescribed.

Insurance Act 2079

Chapter- 14 Transfer of Insurance Business and Merger of Insurer

Section 115: The Authority may give directions to merge or to be amalgamated
1) The Authority may issue direction to any insurer to merge with another insurer or to be amalgamated, prescribing the period in the following conditions:
(a) Recommendation made by the Special Administration Team to the Authority pursuant to clause (b) of Section 109 to merge insurer with other insurer, or
(b) If any director or promoter of the insurer has a financial, professional or personal interest, directly or indirectly, in another insurer.
2) In case of direction provided as in accordance with sub-section (1), the insurer shall submit a merger proposal to the Authority within the prescribed period for the approval and the insurer shall be merged with another insurer after receiving approval from the Authority.
Insurance Act 2079

Chapter- 14 Transfer of Insurance Business and Merger of Insurer

Section 116: Insurer Many Acquire Another Insurer
1) Any insurer may acquire another insurer performing the same kind of insurance business.
2) If an insurer desires to acquire another insurer pursuant to Sub-section (1), both insurers shall pass a special resolution in relation to the same from their respective General meeting and shall
submit joint application to the Authority for obtaining theoretical approval (approval in principle).
3) In accordance with sub-section (2), investigating upon the application, if it seems reasonable to grant theoretical approval, the Authority may grant theoretical approval on the following grounds:
(a) If it seems reasonable to acquire the targeted insurer by another insurer due to the reason that the targeted insurer being failure to fulfil its short-term or long-term liabilities,
(b) If it is reasonable to acquire the targeted insurer by another insurer due to the targeted Insurer’s failure to maintain paid-up capital pursuant to Section 36 or failure to maintain capital funds to be maintained under this Act,
(c) If the targeted insurer is unable to fail, issue shares with the general public within the prescribed period.
4) Notwithstanding anything contained in sub-section (3), the Authority shall not grant approval to the insurer for acquisition as if acquiring one insurer by another insurer, it seems possible to cause detriment or loss to the insured, increase unhealthy competition in the insurance business or establishment of monopoly or controlled practice of any insurer.
5) The insurer who has received theoretical approval from the Authority pursuant to sub-section (3) shall appoint a valuator possessing qualifications for being an auditor of an insurer to submit a report performing an assessment on the following matters:
(a) Overall financial position of the acquiring insurer and targeted insurer, including the valuation of assets, liabilities and business,
(b) General anticipation of the possible effect on insurance system if targeted insurer is acquired by the acquiring insurer and the business plan of acquirer insurer,
(c) Management of employees of targeted insurer after acquisition,
(d) Management of short-term and long-term liabilities of the targeted insurer after acquisition,
(e) Other particulars as prescribed.
6) The valuator appointed pursuant to sub-section (5) shall submit one copy of the study report prepared by him to the Authority and one copy to the acquiring insurer as well.
7) If it seems appropriate to acquire targeted insurer from the report pursuant to sub-section (6) the Authority shall grant final approval for making acquisition of such insurer.
8) After receiving the approval pursuant to sub-section (7), both insurers shall make a mutual agreement in relation to the management of assets and liabilities of the targeted insurer, and the acquiring insurer shall purchase the defined number of promoter shares or other shares of the targeted insurer.
9) Other provisions related to acquisition of insurer shall be as prescribed.
Insurance Act 2079

Chapter- 15 Liquidation of Insurance Company

Section 117: Liquidation of Insurance Company
1) No insurer shall be liquidated notwithstanding anything contained elsewhere in the prevailing laws.
2) If any insurer desires to be liquidated, an application including an action plan of voluntary liquidation shall be submitted to the Authority having a decision made from the General meeting.
3) On receipt of a request from an insurer pursuant to sub-section (2), the Authority may grant approval to proceed with the liquidation process prescribing the conditions if the Authority is convinced that the insurer is able to pay its entire liabilities while making an investigation upon the application of the insurer.

Insurance Act 2079

Chapter- 15 Liquidation of Insurance Company

Section 118: Conditions Relating to Liquidation of Insurer
1) Notwithstanding anything contained elsewhere in the prevailing laws, if the approval pursuant to section 117 is received from the Authority, it shall be deemed as the commencement of liquidation process from the date of approval received.
2) The following activities shall be performed while liquidating the insurer:
(a) The notice concerning the insurer being in the process of liquidation is to be published at least twice in two national-level daily newspapers and through the Authority’s website within thirty-five days from the date of approval received from the Authority,
(b) The notice concerned with the insurer being in the process of liquidation to be provided to all insured, creditors or concerned persons and the Office of Company Registrar within thirty-five days,
(c) The amount under insurance policy to be paid to the insured, the amount of loan to be paid to the creditors, and all other liabilities to be fulfilled by the insurer within the period prescribed by the Authority,
(d) The amount to be paid to the insured as per clause (c), which has not been matured for payment as per the insurance policy, shall be deemed as having been matured
ipso facto
for the payment on the last day of the period prescribed by the Authority,
(e) While making payment or fulfilling the liabilities, if any insured, creditor or concerned person is absent to receive the payment or the insurer being failure to make payment by any reason, the amount equivalent to the fulfilment of all the liabilities in accordance with clause (c), the conditions determined by the Authority to be deposited in a separate account in the bank as fixed by the Authority,
(f) The insurer shall not perform any act or use any authority that will create any liability after the approval received from the Authority, except that it will be necessary for the liquidation.
3) The license of the insurer shall automatically be cancelled from the date of completion of the liquidation process by the Authority.
4) The Authority may formulate and implement the necessary directives relating to the liquidation of the insurer.
Insurance Act 2079

Chapter- 15 Liquidation of Insurance Company

Section 119: Power of The Authority to Initiate the liquidation Process
Notwithstanding anything contained elsewhere in this Act or in the prevailing laws, the Authority may proceed the insolvency process of any insurer in the following conditions if there are sufficient grounds to prove the existence of these conditions:
(a) The liabilities of the insurer being more than the assets for three consecutive fiscal years,
(b) Being failure to fulfil the liabilities being matured for payment or payment to be made immediately till the date prescribed,
(c) If it is decided to commence the process of Insolvency pursuant to clause (e) of Section 109,
(d) If it is found that the insurer, its director or Chief executive has worked against the interest of the insured and repeatedly violated the directions provided by the Authority for its reform,
(e) Capital fund of the insurer being negative for three consecutive years,
(f) If the license of the insurer has been cancelled pursuant to Section 137,
(g) If an application is submitted by the insurer for liquidation pursuant to Section 117.

Insurance Act 2079

Chapter- 15 Liquidation of Insurance Company

Section 120:   Appointment of a Liquidator
1) The Authority shall appoint a liquidator to precede the actions pursuant to Section 119 and shall publish this information at least twice in two national-level daily newspapers and on the Authority’s website.
2) In accordance with sub-section (1), all insurance business operated by the insurer shall ipso facto be postponed after the Authority appoints a liquidator.

Insurance Act 2079

Chapter- 15 Liquidation of Insurance Company

Section 121: Priorities on the Payment of Liabilities in Case of Liquidation of the Insurance company
Notwithstanding anything contained elsewhere in the prevailing laws, in case the insurer is dissolved or insolvent, payment of liabilities shall be made on the basis of the following order of priority:
(a) Expenses incurred for liquidation or insolvency of the insurer,
(b) Amount to be paid or remained unpaid to the insured,
(c) Taxes, duties and fees to be paid to the Government of Nepal as per the prevailing laws,
(d) Amount of regulation fees to be paid to the Authority,
(e) Remuneration or commission to be obtained by insurance intermediary,
(f) Amount remained to be paid to another insurer instead of the insurance,
(g) Payment of salary, allowances, provident fund, gratuity and other amount due to employees which remained as unpaid
(h) Other liabilities to be borne by the insurer,
(i) Any other liabilities to be paid or fulfilled by the insurer,
(j) Amount to be received by shareholders.
Insurance Act 2079

Chapter- 16 Insurance Claim

Section 123: Settlement of Insurance Claim
1) If an insurance claim has been presented as mentioned in an insurance policy to the insurer, the insurer shall evaluate the loss if required and settle the claim within the prescribed period from the date of presentation of the claim made in case there is not being the necessity of evaluation of loss.
2) If the insured or his/her, pursuant to the prevailing laws, is not found within the prescribed period or payment for the claim cannot beneficiary pursuant to the prevailing laws is not found within the prescribed period or, payment for the claim could not be made, such amount instead of claim shall be deposited in ‘unclaimed fund’ with the condition that it shall be paid at the time claim is made.
3) If the person entitled to receive the amount instead of insurance claim is not found, the insurer shall keep evidence of searching the insurer or beneficiary by any means, tried to contact or attempted adequately to make the payment of amount. The insurance claim is not found, the insurer shall keep evidence of searching the insurer or beneficiary by any means, tried to contact or attempting adequately to make the payment of the
4) The insurer shall submit the statement of unsettled claims to the Authority within the stipulated period.
5) Notwithstanding anything contained elsewhere in this Act, if a serious disaster, including other catastrophe situations, has arisen in any place or area of the country, the Authority may form and implement a separate working procedure related to insurance claims for a certain period for such a place that suffered from a catastrophe situation.
6) Other provisions relating to settling insurance claims and unclaimed funds shall be as prescribed.

Insurance Act 2079

Chapter- 16 Insurance Claim

Section 124: Payment of Re-insurance Claim
1) The insurer performing re-insurance shall pay the amount in lieu of re-insurance claim on the basis of re-insurance contract made between the insurer performing insurance business and the insurer performing re-insurance business.
2) Settlement of re-insurance claim and other provisions relating to it shall be as prescribed.

Insurance Act 2079

Chapter- 16 Insurance Claim

Section 125: Settlement of Small Amount Claim
1) The liability, instead of the claim of a small amount that is less than the prescribed limit by the Authority, shall be settled under the settlement of the claim of a small amount.
2) Other provisions relating to payment of a claim of a small amount shall be as prescribed.

Insurance Act 2079

Chapter- 16 Insurance Claim

Section 126: Apparent loss or damage
1) The damage or loss having nature as prescribed by the Authority shall be settled under apparent damage or loss.
2) Other provisions relating to settlement of apparent damage or loss shall be as prescribed.
Insurance Act 2079

Chapter- 16 Insurance Claim

Section 127: Person Entitled to Get Payment
1) In case of the death of any insured before making the payment of the claim under a life insurance policy, the amount prescribed in the insurance policy shall be received by the person nominated by the concerned insured in an insurance policy.
2) In case no one has been nominated by the insured or the nominated person has already died before the death of the insured, such amount shall be received by the beneficiary of the insured as per the prevailing laws.
3) Notwithstanding anything mentioned in sub-sections (1) and (2), if the insured has provided authority to someone, the right of priority to obtain the insurance claim to the extent of the authorised amount shall be secured to the person who has been authorised by the insured.

Insurance Act 2079

Chapter- 17 Provision Relating to Complaint

Section 128: Complaint Relating to Payment of Claim
1) In case the insurer fails to pay an insurance claim within the period mentioned in the insurance policy, does not determine the liability, or does not determine the liability, causing detriment (loss) to the insured, the concerned insured may file a complaint with the Authority.
2) If a complaint is made pursuant to sub-section (1), the Authority shall provide a time of fifteen days for the concerned insurer to submit clarification after making the necessary investigation upon the complaint.
3) If the clarification pursuant to Sub-section (2) is received, receiving the evidence pertaining to it and if the clarification is not received from the insurer within the period prescribed to submit the clarification, the Authority may perform as follows:
(a) To make a compromise between the complainant and the insurer,
(b) To order to compensate reasonably if the insured suffered a loss due to not making payment of a claim,
(c) To order the concerned insurer to re-determine the liability if the pre-determined liability seems to be inappropriate,
(d) If it seems that the payment of claims  is to be made by the insurer to order the concerned insurer to make the payment,
(e) To give other appropriate orders.
4) If any complaint was made against any insurer due to not making payment as per the insurance policy and it is decided that the claim is to be paid, if so, the concerned insurer shall have to make payment of interest at the rate of ten percent from the date of filing complaint and amount equivalent to the actual expenses incurred for receiving legal remedies in addition to the insurance amount to the complainant.
5) Any insurer, insured, or any other person who is not satisfied with the order made by the Authority pursuant to sub-section (3) may appeal in the concerned High Court within thirty-five days.
6) Other provisions relating to actions upon the complaint under this section shall be as prescribed.