Insurance Act 2079

Chapter-6 Board of Directors and Chief Executive

Section 57: Appointment of the Executive Director
1) For the management of an insurance company, the board shall appoint the chief executive of the insurance company subject to this Act and the memorandum of association and articles of association.
2) The chief executive’s office shall be for a maximum of four years, and he or she may be reappointed for the next one-tenure only.
3) Notwithstanding anything specified in sub-section 2, if the performance of the chief executive officer is unsatisfactory, the board of directors can remove them at any time.
Provided that a reasonable opportunity of being heard shall be provided to defend themselves.
4) While making the appointment of the chief executive, a person with the following qualifications and experience shall be appointed and information thereof shall be provided to the Nepal Insurance Authority about the appointment within 7 days:
(a) Having attained a Master’s Degree or equivalent in the subject of insurance, monetary, banking, finance, economics, commerce, management, public administration, statistics, mathematics or commercial law and having work experience of at least five years as an executive level in insurance sector or having work experience of at least eight years as an Executive level in banking or financial sector or having work experience of at least seven years with at least one year in the insurance sector if such person has experience in both insurance and banking or financial sector or,
(b) Chartered Accountant or having bachelor’s or equivalent in the subject of insurance, monetary, banking, finance, monetary, economics, commerce, management, public administration, statistics, mathematics or engineering or commercial law and having work experience of at least ten years as an executive level in insurance sector or having work experience of at least fifteen years as an executive level in banking of financial sector or having work experience of at least twelve years with at least one year in insurance sector if such person have experience in both insurance and banking or financial sector.
5) The following persons shall not be eligible to become a Chief Executive Officer of an insurance company:
(a) If he or she is unable to work as director due to physical or mental illness,
(b) If they have been blocked as per prevailing laws, and a period of at least three years has not been lapsed after removal of their name from the blocklist,
(c) An incumbent/serving Director of the insurance company or his family member or an employee of the insurance company or insurance mediator or advisor,
(d) Served as auditor of such insurance company during previous three years,
(e) Working as securities business person or is a member of securities market,
(f) With financial interest with the insurance company,
(g) Already been chairman of board of directors,
Provided that nothing in this clause shall prevent from nominating a Director or chairman by Government of Nepal,
(h) A person who had been chief executive officer and a period of six months had not expired since he left the post,
(i) If they have not completed a period of three years after serving out the sentence of imprisonment as per prevailing laws,
(j) Having obtained permission of permanent residency of any foreign country,
However, this clause shall not be applicable for appointment of chief executive officer of foreign insurer or insurance company in joint investment with foreign insurer,
(k) If they have been convicted for an offence of theft, cheating, forgery, fraud, corruption, any offence involving moral turpitude or offence related to insurance or banking or money laundering,
(l) Holding any constitutional post.
6) Notwithstanding anything mentioned elsewhere in this section, insurance company in which majority shares is held by foreign insurer or foreign insurance company may appoint its employee as Chief Executive officer, subject to provisions of this Act.
7) Branch of foreign insurer located in Nepal may appoint a person as a Chief Executive Officer who is qualified and have experience as provided in this Act.
8) Remuneration and other terms, conditions and facilities with regard to service of chief executive officer, shall be prescribed by the board of directors and shall be fixed at the time of appointment itself.