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

Chapter-6 Board of Directors and Chief Executive

Section 58: Functions, Duties and Power of Chief Executive
1) The major duties of the chief executive officer shall be to undertake the daily management and administrative functions of the insurance company as per the policies passed by the Board of Directors, directives issued by the Nepal Insurance Authority and prevailing laws.
2) The following are the functions, duties and powers of the Chief executive:
(a) To implement the decisions of the Board and supervise and control the activities and transactions of the insurance company, subject to this Act and the Memorandum of Association and Articles of Association,
(b) To prepare annual budgets and action plans of the insurance company and present them before the Board for approval,
(c) To manage necessary human resources, subject to the personnel bye-laws of the insurance company,
(d) To implement, or cause to be implemented, the decisions of the Board and the General Meetings,
(e) To operate the insurance company as per this Act and directions of the Nepal Insurance Authority and ensure efficient internal control system and risk management in the insurance company,
(f) To present on time all such particulars, documents, decisions, etc., as are required to be submitted by the insurance company to the Nepal Insurance Authority or any other body subject to this Act and the Memorandum of Association and Articles of Association.
3) The Executive Chief shall be accountable to the Board for all of their functions.

Insurance Act 2079

Chapter-6 Board of Directors and Chief Executive

Section 59: Technical or Management Service Agreement
1) The insurer may enter into technical or management service contracts or agreements with Nepali Individuals or foreign corporate bodies by obtaining prior approval from the Nepal Insurance Authority.
2) Before entering into a contract as per sub-section (1), the draft of such agreement shall be presented to the Nepal Insurance Authority for approval.
3) Other technical or management service contracts or agreement provisions shall be as prescribed.

Insurance Act 2079

Chapter-6 Board of Directors and Chief Executive

Section 60: Able to create a whistleblowing policy
1) In order to comply with this act or rules or regulations made thereunder or directives issued by the Nepal Insurance Authority, for providing information in secret ways of any acts or activities done or that may be done in irregular ways carried out by Insurer’s management or officials or employees, may prepare and implement a whistle-blowing policy.
2) In accordance with sub-section (1), it shall be the duty of the board of directors of the concerned insurer to protect the professional safety of the person who provides secret information about whistle-blowing done by the insurer’s chief executive officer or officials or auditor or employees or insurance mediators.
Insurance Act 2079

Chapter- 7 Operation of Insurance Business

Section 61: Type of Insurance Business
1) There are three type of insurance business:
(a) Life insurance business,
(b) Non-life insurance business,
(c) Reinsurance business.
2) The insurer operating life insurance business may undertake any portfolio of insurance business as prescribed, subject to the license.
3) The insurer operating non-life insurance business may undertake any portfolio of insurance business as prescribed, subject to the license.
4) The portfolio of insurance business to be operated by reinsurer shall be as prescribed by the Nepal Insurance Authority.

Insurance Act 2079

Chapter- 7 Operation of Insurance Business

Section 62: Insurance Contract
1) Insurance Contract shall be in written form.
2) Essential elements of insurance contract shall be insurance proposal, insurance policy and its annexures and all the ratifications issued in relation to such.
3) While entering into an insurance contract, both parties (i.e. insurer and insured) shall disclose to each other, all the factual information related to proposed risk in absolute good faith or belief or trust.
4) The person getting insured must have insurable interest in the object of insurance.
5) Other provisions related to insurance contract shall be as prescribed.

Insurance Act 2079

Chapter- 7 Operation of Insurance Business

Section 63: Insurance Policy
1) The insurer shall issue an insurance policy in the format as approved by the Nepal Insurance Authority.
2) Insurance contract between insurer and insured shall be effective once insurance policy is issued, and the terms and conditions specified in such insurance contract shall be binding for both parties i.e. insurer and insured.
3) The insured cannot raise any issues in relation to the matters not specified in the insurance contract after expiry of one year form the date of issue of insurance policy.
4) Notwithstanding anything mentioned in sub-section (3), after issue of insurance policy, if it is found that the insured had, with
mala fide
intention, concealed some material and persuasive facts related to insurance risks or had submitted false details, the insurer may give directions to rectify such details to the insured at any time or may also withdraw any facilities provided to insured.
5) The insured may transfer the insurance policy of his life insurance to any other person in a matter as prescribed.
6) Other provisions related to insurance policy shall be as prescribed.
Insurance Act 2079

Chapter- 7 Operation of Insurance Business

Section 64: Insurance Premium
1) The insured shall calculate the insurance premium as per the tariff prescribed by the Nepal Insurance Authority.
2) Insurer shall not accept insurance risk and issue insurance policy without receiving all insurance premium.
3) Notwithstanding anything mentioned in sub-section (2), if any practical difficulty arises due to any reason for paying the amount in a lump sum, this Section shall not be deemed to be prohibited to issue an Insurance Policy on the guarantee of a bank or the Nepal Government relating to the payment of the outstanding amount within a specified period.
Provided that insurance policy shall not be issued against bank guarantee of period longer than thirty days.
4) Notwithstanding anything mentioned elsewhere in this section, nothing shall hinder to issue insurance policy in case of life insurance in instalments and in case of specific type/ category of non-life insurance business by payment of partial amount.
5) If insurer do not receive the amount of insurance premium, in time, from the person or corporate body who has responsibility to collect insurance premium and make payment to insurer, the insurer shall provide information about such to the insured.
6) Other provisions related to insurance tariffs and insurance premium shall be as prescribed.

Insurance Act 2079

Chapter- 7 Operation of Insurance Business

Section 65: Group Insurance Fund
In order to bear liability of any special risk area, the Nepal Insurance Authority may direct insurer to establish or cause to establish an insurance pool.

Insurance Act 2079

Chapter- 7 Operation of Insurance Business

Section 66: Insurance Not to Be Done
1) Notwithstanding anything mentioned elsewhere in this act, insurance company shall not undertake insurance risk of assets or liabilities of any of the following persons or corporate bodies:
(a) Liabilities to be borne by the insurer itself
(b) Substantial shareholder, director, advisor, auditor employees or their family members of the insurer
(c) Substantial shareholder of the insurer or their family members
(d) Any firm, company or corporate body who have rights to nominate or appoint its’ director
(e) Any firm, company or corporate body in which director of the insurer has financial interest or any firm, company or corporate body in which any of it’s Directors or his/her family member is working as a Managing Agent or partner.
Provided that, this provision shall not restrict any life insurance company to insure the above-mentioned person, within the purview of the insurance policy and terms and conditions and
limitations provided by the Nepal Insurance Authority.
2) Notwithstanding anything mentioned elsewhere in this section, the provisions of sub-section (1) shall not be applicable to the insurance company undertaking insurance of assets or liabilities under ownership of the Government of Nepal.
Insurance Act 2079

Chapter- 7 Operation of Insurance Business

Section 67: Restrictions on undertaking business in partnership or acquire assets in ownership
1) Insurer shall not undertake any business in partnership or acquire assets in ownership with director, director’s family members, substantial shareholders, chief executive officer, person with financial interest, any firm, company or corporate body in which the insurer or its director is managing agent or partner.
2) If any insurer had undertaken any business in partnership or acquired assets in ownership with director, director’s family members, substantial shareholders, chief executive officer, person with financial interest, any firm, company or corporate body in which the insurer or its director is managing agent or partner, before the commencement of this act, such partnership or assets in ownership shall be terminated within six months of commencement of this Act.

Insurance Act 2079

Chapter- 7 Operation of Insurance Business

Section 68: Possession of Property Prohibited
1) Except for the benefits or privileges granted to the director, chief executive officer, shareholder, employee or insurance intermediary of the company in accordance with the prevailing law, the property of the insurer shall not be used in any way by the director of the insurer, the director’s immediate family, a fundamental shareholder, a person with a financial interest, any firm, company or organisation in which the insurer or its director is a managing agent or a partner, or the chief executive officer.
2) Insurance company shall not take in rent or use in any other way the assets of director, director’s family members, substantial shareholders, chief executive officer, any firm, company or corporate body in which the insurer or its director is managing agent or partner.
Insurance Act 2079

Chapter- 7 Operation of Insurance Business

Section 70: The Insurance Appraisal
1) An insurer engaged in insurance business shall have its financial position, assets, liabilities and financial position assessed by an actuary appointed with the approval of the Authority.
2) The concerned insurer shall submit a copy of the assessment report provided by the insurer pursuant to sub-section (1) to the Authority.
3) Other provisions relating to the assessment of the actuary shall be as prescribed.

Insurance Act 2079

Chapter- 7 Operation of Insurance Business

Section 71: Allocation of Savings
1) In the case of a life insurance policy ensuring participation in profits, the insurer shall, on the basis of the valuation report of the actuary, allocate and make provision for savings from the life insurance business.
2) For the purpose of allocating and provisioning the savings pursuant to sub-section (1), the insurer shall, with the approval of the Nepal Insurance Authority, transfer at least ninety percent of savings to the Life Insurance Fund.
3) Other provisions relating to apportionment and provisioning savings from the life insurance business shall be as prescribed.

Insurance Act 2079

Chapter- 7 Operation of Insurance Business

Section 72: Accepting risk based on the property itself
1) The insurance company shall undertake insurance risk on the basis of its own Net Assets.
2) Other provisions relating to undertaking risks by the insurer shall be as prescribed.

Insurance Act 2079

Chapter- 7 Operation of Insurance Business

Section 73: Investment in Subsidiary Company
1) An Insurance company may, with approval from the Nepal Insurance Authority, incorporate its own subsidiary company or invest in such companies.
2) While granting approval for incorporation of its own subsidiary company or making an investment in such companies pursuant to sub-section (1), the Nepal Insurance Authority may prescribe necessary terms and conditions, and it shall be the duty of the concerned insurer to comply with such terms and conditions.
3) Notwithstanding anything mentioned elsewhere in this section, an insurer shall not incorporate a subsidiary company or make investments in such companies, which are undertaking the same type of insurance business as that of such insurer.
4) Other provisions related to investments to be made by the insurer shall be as prescribed by the Nepal Insurance Authority from time to time.

Insurance Act 2079

Chapter- 7 Operation of Insurance Business

Section 74: Obtained Approval While Selling Assets
1) The Foreign Insurance company shall, while selling or pledging any immovable assets located in Nepal or while selling or pledging any movable assets more than the prescribed limits or while taking back such assets to a foreign country, obtain approval from the Nepal Insurance Authority in addition to the approval to be obtained as per prevailing acts.
2) The Nepal Insurance Authority may prescribe necessary terms and conditions when granting such approval pursuant to sub-section (1).
Insurance Act 2079

Chapter-8 Micro Insurance Business

Section 75:  Micro Insurance is Required
Every insurance company shall undertake a micro-insurance business targeting the low-income, indigent and backward-class sectors.

Insurance Act 2079

Chapter-8 Micro Insurance Business

Section 76: Incorporation of Insurance Company for Micro Business Only
1) Notwithstanding anything mentioned elsewhere in this act, an insurance company may be incorporated only for undertaking a micro-life insurance business or a micro non-life insurance business.
2) The capital of micro-insurance companies to be established as per sub-section (1), shall be as prescribed.
3) Provisions relating to incorporation and licensing of micro-insurance companies to be established as per sub-section (1), shall be as per this Act.

Insurance Act 2079

Chapter-8 Micro Insurance Business

Section 77: Contract to be made
1) Before the appointment of insurance agents to carry on activities related to micro-insurance, the insurer shall enter into a written contract with such agents.
2) When entering into a written contract with such insurance agents, if such agent is a corporate body established per relevant Acts, the prescribed rights should be delegated to such agents.

Insurance Act 2079

Chapter-8 Micro Insurance Business

Section 78: Claim of Micro-Insurance
1) The insured carrying on a micro-insurance business shall pay the claims related to life insurance or insurance of assets or liabilities, as provided in the insurance policy, within 21 days from the date of receipt of the claim, in proper form, from the concerned insured.
2) Other provisions related to claims of micro insurance shall be as prescribed.

Insurance Act 2079

Chapter-8 Micro Insurance Business

Section 79: Micro-Insurance Regulation Fees
To obtain regulatory services for micro insurance, every insurer shall pay the Board an amount equal to 0.5 percent of the Gross Premium earned from the Insurance Business in each fiscal year.

Insurance Act 2079

Chapter- 9 Re-Insurance Business

Section 80: Reinsurance Required
The Insurer shall re-insure the portion of the risk which is excess of the risk to be held by the Insurer.
Insurance Act 2079

Chapter- 9 Re-Insurance Business

Section 81: Re-Insurance Business
1) Notwithstanding anything mentioned elsewhere in this act, provisions relating to the insurance company undertaking re-insurance business shall be as follows:
(a) The insurance company undertaking a re-insurance business can accept reinsurance of life insurance as well as non-life insurance.
(b) The insurance company undertaking the reinsurance business can accept the re-insurance from the foreign insurance company as well as a foreign re-insurance company or provide a re-insurance service to such foreign insurance company as well as a foreign re-insurance company.
(c) Insurance company doing its business in Nepal shall, compulsorily re-insure its risk, not less than the percentage prescribed by the Nepal Insurance Authority, with a Reinsurance Company established in Nepal.
2) The insurance company undertaking re-insurance business may do such business on its own or through insurance brokers.
3) Other provisions related to the re-insurance business shall be as prescribed.

Insurance Act 2079

Chapter- 9 Re-Insurance Business

Section 82: Provisions related to re-insurance contracts
1) While undertaking the re-insurance business, the re-insurance company shall approve the format of its re-insurance contract from the Nepal Insurance Authority.
2) The Nepal Insurance Authority may, at any time, give directions to review the terms and conditions mentioned in the re-insurance contract if it has reasons to believe that the contract made between the insurance company and the re-insurance company is against the interest of the insured or such contract do not cover the risks completely
3) Other provisions related to re-insurance contracts shall be as prescribed.

Insurance Act 2079

Chapter- 10 Accounts and Audit of Insurance

Section 83: Accounts to be maintained accurately
1) The insurance company shall have to maintain its accounts, books, and records precisely and correctly.
2) The accounts to be maintained pursuant to sub-section (1) shall have to be maintained according to the recognised principle of a double-entry bookkeeping system reflecting the exact status of transactions of the insurance company.
3) Unless otherwise approved by the Nepal Insurance Authority, the accounts and other statements to be maintained pursuant to sub-section (1) shall have to be maintained at its head/ central office.
4) Other provisions related to accounts of an insurance company shall be as prescribed.
Insurance Act 2079

Chapter- 10 Accounts and Audit of Insurance

Section 84: Preparation of Financial Statements
1) The insurance company shall, within thirty days of the expiry of each quarter, submit its quarterly financial statements, including receipts payment accounts, net assets and changes in it, insurance claims, re-insurance claims and investments.
2) The insurance company shall, within six months of the expiry of a financial year, prepare an audited balance sheet and profit and loss account and submit it to the Nepal Insurance Authority in the format prescribed.
3) The insurance company shall disclose the details of its financial position along with its risk position every three months.
4) Other provisions related to the financial statements of an insurance company shall be as prescribed.

Insurance Act 2079

Chapter- 10 Accounts and Audit of Insurance

Section 85: Audit Committee of Insurer
1) The insurance company which had obtained a license to operate insurance business after commencement of this act shall within thirty days of commencement of its insurance business or the insurance company existing at the commencement of this act which had not formed an Audit Committee shall within thirty days of commencement of this act, form an Audit Committee comprising of three members under the convener-ship of a director representative from general shareholders.
2) The chairman or chief executive officer or chief of accounts department of their close relatives shall not be member of the Audit Committee formed as per sub section (1).
3) The functions, duties and powers of the Audit Committee shall be as follows:-
(a) To review the financial statements of the insurer and ensure the basis, authenticity and reliability of information extracted from such financial statements,
(b) To ascertain whether or not the accounts, budget and internal control mechanism of insurer are appropriate or not,
(c) To ensure whether the purchase/procurement policy of the insurer is appropriate, efficient and economical and to supervise and regulate such purchase/procurement policy,
(d) To ensure whether the accounts, documents and records of internal audit systems  and electronic records are maintained appropriately,
(e) To ensure whether the activities related to calculation of insurance risks, claims, investments, and reinsurance had been done properly or not and to ensure whether the documents related to such activities had been adequately maintained or not,
(f) To ensure whether the accounts, audit balance sheet or financial statements of the insurer or such documents are prepared according to the prevailing law, regulation and directives of the Nepal Insurance Authority,
(g) To recommend names of three auditors for appointment of the external auditor,
(h) To furnish opinion on the subjects as required by the Board of Directors,
(i) To ensure whether or not the insurer had complied with the directives issued by the Nepal Insurance Authority.
4) The Audit Committee shall submit a report of its activities to the board of directors of the company.
Insurance Act 2079

Chapter- 10 Accounts and Audit of Insurance

Section 86: Appointment of Auditor of Insurer
1) The insurance company shall appoint auditor as per prevailing laws.
2) Notwithstanding anything mentioned in sub-section (1), any of the following persons shall not be appointed as an auditor of the insurance company:
(a) Substantial shareholder, director or his\her close relative,
(b) Chief Executive Officer or his\her close relative,
(c) Insurance Mediator of the insurer, employees or his\her family member,
(d) In case of ex-employee, if three years had not expired after leaving from the office,
(e) A person working as a partner of any director or chief executive officer, or employee of the insurer,
(f) A person with financial interest with the insurer or his/her family member,
(g) The insured who had undertaken insurance form the insurer in the amount exceeding the prescribed limit,
(h) A person who had been appointed as auditor of the concerned insurer for three consecutive years,
(i) Member of the Board of Nepal Insurance Authority, an incumbent employee of the Nepal Insurance Authority or their partner or their family member,
(j) A person, who is disqualified to be appointed as auditor or disqualified to continue to hold office as auditor as per prevailing laws.