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

Chapter- 10 Accounts and Audit of Insurance

Section 87: Audit of Insurer
1) An insurance company shall, within three months from the date of completion of the Fiscal Year, have to get the external audit conducted.
2) In case the insurance company not complete the auditing within the period referred to in sub-section (1) and makes a request for an extension of time for auditing, stating reasonable cause, the Nepal Insurance Authority may extend the period up to two months
3) The audit report shall include details in case any remarks or irregularities have been found while conducting the audit and, if such remarks or irregularities have been found, whether a reply from the management of the insurer had been obtained or not about such matter.
4) Notwithstanding anything mentioned elsewhere in this section, Nepal Insurance Authority may also prescribe a separate format for the Long Form Audit Report and in such case, the Auditor shall prepare the audit report as per such format and submit it to the Nepal Insurance Authority
5) The insurance company shall, within thirty days of completion of its audit, submit its financial statements to the Nepal Insurance Authority for approval.
6) The Nepal Insurance Authority may, if necessary for discussion about the matters related to financial statement, call for a director or chief executive officer or auditor or other related person, and it shall be the duty of such person to be present in front of the Nepal Insurance Authority in such case.
7) The insurance company shall not submit its report to any authorities except government authorities or publish or call an annual general meeting without submitting its report to the Nepal Insurance Authority as per sub-section (5).
8) The insurer should publish its audited annual financial statement at least 2 times in national-level newspapers and on the suit website.
9) Notwithstanding anything mentioned in any prevailing laws, if the audit of the insurance company could not be conducted even if time had been extended as per sub-section (2) due to the non-appointment of an auditor, the Nepal Insurance Authority may itself appoint an auditor of such insurance company.
10) Remuneration and other expenses of the auditor appointed pursuant to sub-section (9) shall be borne by the concerned insurance company itself
11) Provisions relating to matters that are to be disclosed in the audit report and other provisions related  to the audit of insurance company shall be as prescribed

Insurance Act 2079

Chapter- 10 Accounts and Audit of Insurance

Section 88: Right to give order with respect to Audit of Insurer
1) Authority may, if deemed necessary, order the auditor of the insurance company to carry out the following additional functions:
(a) To submit additional information as required by the Nepal Insurance Authority concerning auditing,
(b) To carry out other tests on specific matters as directed by the Nepal Insurance Authority or on matters recommended to the insurance company by the Nepal Insurance Authority.
2) All the expenses related to re-audit pursuant to sub-section (1) shall be borne by the concerned insurance company itself.
Insurance Act 2079

Chapter- 10 Accounts and Audit of Insurance

Section 89: Recommending Action
The Nepal Insurance Authority shall write to the concerned regulating authority to remove the name of an auditor who does not perform his/her duties as per this Act, from the panel of the auditors to prohibit him/her to carry out audit of any insurance company for one year to three years.

Insurance Act 2079

Chapter- 11 Provisions Related to Insurance Mediators or Other Insurance Service Provider

Section 90: Work should not be done without a license
No person shall carry out the functions of Insurance mediators without obtaining a license under this Act.

Insurance Act 2079

Chapter- 11 Provisions Related to Insurance Mediators or Other Insurance Service Provider

Section 91: License to Insurance Mediators
1) Any person who is desirous of obtaining a license in relation to insurance intermediaries shall submit an application for a license to the Nepal Insurance Authority along with the prescribed documents and fees.
2) On receiving the application per sub-section (1), the Nepal Insurance Authority, after examination of documents, if it finds it appropriate, shall issue a license to carry on insurance intermediaries.
3) Validity of the issued license shall be of 3 years.
4) While granting the license of the Insurance Surveyor under non-life insurance, the license shall be issued to conduct the survey of one type of insurance (Portfolio) only.
However, this provision shall not apply to the companies established with the objective of carrying out the business as an insurance surveyor
5) Any person who had obtained the license of insurance surveyor of any insurance portfolio before the commencement of this act shall choose to carry one insurance portfolio within one year from the commencement of this act.
6) License issued under this act, cannot be used by, handed over or transferred to others.
7) When Issuing Insurance agent’s license, only one license of the same type will be issued.
8) The provisions regarding insurance mediators and other insurance service providers shall be as prescribed.

Insurance Act 2079

Chapter- 11 Provisions Related to Insurance Mediators or Other Insurance Service Provider

Section 92: Qualifications of Insurance Mediators
1) The qualification of insurance mediators shall be as prescribed by the Nepal Insurance Authority.
2) Before acquiring the license, insurance mediators must pass the prescribed examination.
3) The license of insurance brokers or third-party insurance facilitators shall be granted only to the following corporate bodies incorporated as per prevailing laws:
(a) With the authorised capital as prescribed by the Nepal Insurance Authority,
(b) The person working as the General Manager of the corporate body shall have 4 years of experience in the Insurance Business,
(c) Meeting other criteria as specified by the Nepal Insurance Authority.
4) The provisions regarding insurance mediators and other insurance service providers shall be as prescribed.
Insurance Act 2079

Chapter- 11 Provisions Related to Insurance Mediators or Other Insurance Service Provider

Section 93: Responsibilities of Insurance Intermediaries
1) The insurance mediators shall keep a copy of the license at their registered office to be clearly seen.
Provided that individual mediators and surveyors must show the license if requested by the concerned person.
2) The insurance mediators shall abide by the rules or regulations made under this act or the directives or directions provided by the Nepal Insurance Authority.
3) The insurance surveyor shall not evaluate or conduct a survey or cause to evaluate the loss of its close relatives or firms or companies where its family members belonging to the same family or their close relatives have a financial interest.
4) The insurance surveyor shall submit the report to the concerned insurer within the prescribed time.
5) The  Insurance  Surveyor shall employ only licensed insurance surveyors to carry out insurance surveys.
6) An insurance agent of any insurance shall not act as an insurance agent of another insurance of the same type during the same period.
Provided that this provision shall not be deemed to have prevented an insurance agent of an insurer carrying on life insurance business from acting as an insurance agent of an insurer carrying on non-life insurance business and an insurance agent of an insurer carrying on non-life insurance business from acting as an insurance agent of an insurer carrying on life insurance business.
7) Notwithstanding anything contained in sub-section (6), an insurance agent engaged in microinsurance activities may act as a microinsurance agent for more than one insurer.
8) An insurance broker or a third-party insurance facilitator shall not make any investment, guarantee or security or give any loan to any corporate body in which any member of its board of directors is a member of the board of directors or has any financial interest.
9) The work performed by an insurance intermediary or other insurance service provider, remuneration or commission, official conduct and other provisions shall be as prescribed.
Insurance Act 2079

Chapter- 11 Provisions Related to Insurance Mediators or Other Insurance Service Provider

Section 94: Renewal of License of Insurance Intermediaries
1) If an insurance intermediary or other insurance service provider wishes to renew its license, it must submit an application to the Authority, attaching the prescribed fee and other details, before the license expires.
2) If the application for license renewal cannot be submitted within the period specified in sub-section (1), the authority may extend the time limit for renewal for a maximum of three months if reasonable cause is produced.
3) If an application for renewal is received within the period pursuant to sub-section (1) or (2), the license shall be renewed for a period of three years if, upon necessary investigation, it is deemed appropriate to renew it.
4) If the license cannot be renewed, the Nepal Insurance Authority should provide a letter explaining the reason for non-renewal.
5) Other provisions regarding the renewal of the license of an insurance intermediary or other insurance service provider shall be as prescribed.

Insurance Act 2079

Chapter- 11 Provisions Related to Insurance Mediators or Other Insurance Service Provider

Section 95: Cancellation of License
1) The license of insurance intermediaries or other insurance service providers should be
ipso facto
cancelled if it cannot be renewed under section 94.
2) If any insurance intermediary or other insurance service provider submits a written application to the Authority to revoke its license, the Authority may, after investigation, revoke such license as prescribed.
3) Notwithstanding anything contained elsewhere in this act, NIA cancel the license in the following circumstances:
(a) Acted against this act or rules or regulations made under this act or directives or directions provided by Authority or
(b) If it is proved that such Insurance Mediator or Other Insurance Service Provider had acted against the interest of the insured.
4) Before revoking a license pursuant to Sub-section (3), the Authority shall give the concerned insurance intermediary or other insurance service provider a reasonable opportunity to present its defence.

Insurance Act 2079

Chapter- 11 Provisions Related to Insurance Mediators or Other Insurance Service Provider

Section 96: Non-Renewal
Notwithstanding anything contained elsewhere in this act, if the insurance intermediaries are not able to fulfil their responsibilities as per section 93 or have acted against the interest of the insured, Nepal Insurance Authority shall not renew their licenses.
Insurance Act 2079

Chapter- 11 Provisions Related to Insurance Mediators or Other Insurance Service Provider

Section 97: Prohibition to act
1) No person shall act as an insurance agent or insurance intermediary without a license or whose license has not been renewed.
2) If any insurer has appointed insurance intermediaries who have not complied with sub-section (1), all the responsibilities shall be borne by the insurer himself.
3) Any liability arising from any insurance business activity carried out by an insurance intermediary or other insurance service provider whose license has been revoked during the term of the license shall be borne by the concerned insurer.
4) No insurance agent or intermediaries shall act as a director or, chief executive officer or employee or, advisor of Insurer.
Insurance Act 2079

Chapter- 12 Regulation, Inspection and Supervision

Section 98: To Regulate, Inspect and Monitor
1) The Authority may regulate, inspect, or monitor the activities of any insurer, insurance intermediary, other insurance service provider, or the person or organisation concerned with such insurer, insurance intermediary, or other insurance service provider at any time.
2) In case having suspicion or receiving a complaint about the business of any insurer, insurance intermediary, or other insurance service provider, the Authority may regulate, inspect or monitor at any time by assigning any expert or employee of the Authority to make onsite supervision of the office of the insurer or the insurance intermediary or other insurance service provider or making the insurer to bring the related documents, accounting and financial statements, insurance policies or deeds, related, reports and information in authority.
3) While performing regulation, inspection and monitoring of the insurance business as mentioned in sub-section (1), the authority shall follow internationally established principles, values, standards and, best practices and customs.
4) The expert or employee assigned for supervision as per sub-section 2, may demand, observe, inspect examine, research, investigate the logbook, data, information, notices, reports, electronically created information or any other necessary documents, ask for original or duplicate copies or inquiry about the same with the concerned personnel.
5) It shall be the duty of the insurer, insurance intermediary, other insurance service providers, insured, and persons related to the insurance business to provide the information requested under sub-section (4).
6) If the expert or employee assigned to regulate, inspect or monitor under this Section finds some faults or weakness in the works performed by the insurer, its workings and actions or documents, any actions and working or documents being suspicious or not being as per the rules and regulation framed under this Act or directives issued by the Nepal Insurance Authority, the expert or employee may make concerned official to give detail explanation or description.
7) The expert or employee assigned for regulation, inspection or monitoring, if realised, may issue any directions or instructions by informing the authority, and it shall be the duty of the insurer or concerned personnel to follow this instruction.
8) The expert or employee assigned to regulate, inspect or monitor shall submit the report of inspection or monitoring to the Authority within the time determined by the Authority.
9) In case some sort of cooperation is sought by the Authority from the Government of Nepal, any bodies of the Nepal Government, any bodies of provincial or local level, other regulatory bodies or organisations to perform or to be performed the function of regulation, inspection or monitoring under this Section it shall be the duty of these authorities or organisations to co-operate to the Authority
10) Other provisions related with regulation, inspection or monitoring of insurance business shall be as determined by the Authority.
Insurance Act 2079

Chapter- 12 Regulation, Inspection and Supervision

Section 99: Foreign Insurance Company shall inform to the Authority
1) Foreign Insurance Company shall inform the Authority in writing before performing inspections or monitoring their branch established in Nepal.
2) Foreign Insurance Company company shall, after conducting inspection or monitoring in accordance with sub-section (1) at its branch office opened in Nepal, prepare a report and submit a copy thereof to the Authority.

Insurance Act 2079

Chapter- 12 Regulation, Inspection and Supervision

Section 100: Regulation Fee
1) Every insurer obtaining the regulatory service by the Authority shall pay a regulation fee to the Authority every year in lieu of providing regulatory service by it to the insurer, calculated at the rate of 0.75  percent of the total premium earned from insurance fees by the insurer.
2) The insurance intermediary or other insurance service provider shall pay the Authority regulation fees as prescribed in lieu of receiving regulatory service from it.
3) The period, procedure, delay fee and other arrangements for payment of regulation fee as per sub-section (1) and (2) shall be as prescribed.
Insurance Act 2079

Chapter- 13 Problematic Insurer

Section 101: Insurer Deemed to be Problematic
1) Notwithstanding anything contained elsewhere in the prevailing laws, the Authority may declare an insurer as problematic for the sake of interest of the insured if the following conditions exist:
(a) In case the insurer fails to maintain the minimum paid-up capital and capital fund to be maintained,
(b) In case the ratio of total assets and liabilities (solvency margin) is not maintained,
(c) In case it is proved that the promoter shareholders of the insurer have established the insurance company with the earnings through fraud or embezzlement, money laundering, corruption, financial investment in terrorist activities, human trafficking,
(d) In case it is proved that the insurance company was established or the license was received by the insurer by deceiving, forgery, or providing false statements or preparing or submitting fake documents,
(e) In case acts performed against the interest of the insured, shareholders, creditors of insurers or the general public repeatedly,
(f) In case the insurer did not follow the instruction provided by the Authority to be merged with another insurer,
(g) Violating this Act or Rules and By-laws framed under this Act, as well as existing laws, terms, and conditions mentioned at the time of issuing the license or the instructions and orders issued by the Authority, repeatedly,
(h) In case insurance fraud is conducted by the insurer,
(i) If the regulation, inspection, monitoring performed by the Authority or audit report or actuary report discloses the inability of the insurer to fulfil its liabilities or being impossible the same,
(j) In case information on the situation pursuant to sub-section (3) of Section 105 is provided,
(k) If it is observed that the insurance business may not be operated continuously due to disputes between the directors regarding the operation and management of the insurer,
(l) Being failure to submit evidence of improvement within the prescribed period as per the instruction provided by the Authority while imposing a full or partial ban on the insurance business being operated by the insurer,
(m) The insurer failed to fulfil its liability repeatedly.
2) Before declaring an insurer as problematic pursuant to sub-section (1), the Authority shall provide notice of 15 days to the insurer to submit clarification with evidence to prove that there is any reason for not declaring so.
3) In case the insurer being failure to submit the clarification within the given period in accordance with sub-section (2) or the clarification provided by the insurer is not deemed satisfactory and reliable, the Authority shall declare such insurer as problematic insurer and publish the information about the same through at least two national daily newspapers and Authority’s own website.
4) Any insurer which has become insolvent or there is the possibility of occurring such situation as per the prevailing laws, being failure to make payment of the liability to the insured, which is to be paid or net assets being decreased to half or less of the paid-up capital, shall inform immediately to the Authority.
Insurance Act 2079

Chapter- 13 Problematic Insurer

Section 103: Special Administration/Management Team
1) The Authority may constitute a Special Administration Team consisting of three persons possessing prescribed qualifications for the operation and management of the insurer taken under control by the Authority pursuant to sub-section (5) of Section 102, and the Authority may carry forward the operational and managerial activities through this team.
2) The tenure of the Special Administration Team shall be 1 year, and the Authority may extend the tenure for an additional one year based on appropriateness or may dissolve the team.
3) In case performance is unsatisfactory, the Authority may sack (remove) all or any member of the Special Administration Team as prescribed.
4) The Authority may appoint another person possessing the prescribed in accordance with sub-section (1) qualification for the remaining period on the post in case the member of the special administration team is sacked by the Authority before the completion of prescribed tasks.
5) The appointment procedure, remuneration, privileges and other provisions related to the members of the special administration team shall be as determined by the Authority.
Insurance Act 2079

Chapter- 13 Problematic Insurer

Section 105: Official to be Suspended
1) The directors and chief executive officers of the insurer shall be automatically suspended for the duration of the period during which the special management group takes control of the insurer.
2) Notwithstanding anything contained in sub-section (1), the special management group may, if it deems appropriate, lift the suspension of the directors and chief executive officers of the insurer and depute them to perform the specified work.
3) The special management group may, at any time, remove a person who does not perform the work assigned by the special management group pursuant to sub-section (2).

Insurance Act 2079

Chapter- 13 Problematic Insurer

Section 106: Notice of the Work
1) The Special Administration Team  shall give notice, including the following particulars, to every office of the insurer within 3 days from the date of commencement of performing the job, taking the insurer under into its control:
(a) Date and time of beginning of work after taking the insurer under control,
(b) Description of the revoked authority and responsibility of the person handling the main management of the concerned insurer,
(c) The procedure, time and place for claiming insurance by the insured,
(d) The procedure, time and place for claiming various claims by other different parties.
2) The notice pursuant to sub-section (1) shall be published every week for a period of four weeks in at least two national daily newspapers and also through its website.
3) The information regarding to the condition of the insurer taken under the control of the Special Administration Team, changes seen in the authorised person and his/her authority shall be submitted to the Authority, Securities Board of Nepal and the Office of Company Registrar

Insurance Act 2079

Chapter- 13 Problematic Insurer

Section 107: Preparation of New Financial Statements
1) A New financial statement disclosing the insurer’s actual situation under the Special Administration Team’s control shall be prepared as prescribed.
2) The financial statement prepared pursuant to sub-section (1) and detailed information related thereto shall be submitted to the Authority.

Insurance Act 2079

Chapter- 13 Problematic Insurer

Section 108: Provisions After the Achievement of Improvement in Condition of the Insurer
If it is felt that improvement is seen in the condition of the Insurer taken under the control by the Special Administration Team it may take following actions:
(a) To release the suspension of the suspended Board of directors,
(b) To hand over the management of the insurer to the Board of Directors of the insurer,
(c) To form a new Board of directors amongst the shareholders of the Insurer and provide instruction to convene the General Meeting within six months,
(d) To convene a General meeting of the Insurer and form a new Board of Directors.