Asian Life Insurance share trading suspended

KATHMANDU, FEB 3: 

Nepal Stock Exchange (Nepse) has suspended trading of Asian Life Insurance shares following the life insurance company’s spat with the regulator.

“The share of the insurance company has been suspended according to direction given by Sebon,” according to the Nepse.

Trading was suspended on request of the insurance regulator Insurance Board, which suspended the business activities of the insurance company a couple of days back for repeatedly flouting regulations.

The life insurance company distributed cash dividend to its stock holders despite a prohibition imposed by the Board. “Regulation does not allow life insurance companies to issue dividends to the share holders until they increase their paid up capital to Rs 500 million but the company repeatedly flouted the regulation compelling us to take a stringent action,” pointed out chairman of the Insurance Board Prof Dr Fatta Bahadur KC.

Life insurance companies need to increase their paid up capital to Rs 500 million by the end of fiscal year 2012-13. The paid up capital of Asian Life Insurance stands at Rs 360 million at present. 

“The company knew about the regulation when they had applied for the operating licence four years ago,” KC said, “When the company announced its dividend in August 2011, the board has partially halted a few insurance portfolios of the company, but it disregarded the warning and repeated the same mistake again.”

Earlier, the Board has prohibited it from selling new policies but the company can collect premiums on policies that have already been issued.

Source: THT