IB suspends fire business of United Insurance

KATHMANDU:

The Insurance Board (IB) has imposed temporary ban on fire insurance business of United Insurance after the non-life insurer was found engaged in malpractices during claim settlement.

The insurance sector regulator had detected anomalies in settlement of over two-year-old claim filed by CG Electronics, EOL Private Ltd and CG Impex after fire broke out at their warehouse in Satungal.

At that time, a team of surveyors — Surya Prasad Joshi and Rajan Thapa — had prepared a report saying the fire caused loss of around Rs 580 million. Based on this, United Insurance, which had sold five insurance policies to the three companies, extended over Rs 360 million in advance as compensation.

The issue was later picked up by the Commission for Investigation of Abuse of Authority (CIAA), the corruption watchdog. It then asked the IB to conduct an independent investigation.The investigation found that actual loss stood at around Rs 340 million.

The IB has now asked the insurance company to recoup around Rs 30 million that was paid in extra to the three companies.“We have also slapped a fine of Rs 3,000 on each of the surveyors who prepared a fabricated report,” said a senior IB official. “Also, fine of Rs 3,000 each has been imposed on chiefs of underwriting and claim settlement departments of the insurance company who failed to detect the anomalies.”The ban on the fire insurance business would be lifted only if the insurer corrects its mistakes, the official added.

Source: THT