Govt to prevent illegal entry of foreign insurance firms

KATHMANDU, FEB 23 -

Finance Minister Barsha Man Pun said on Friday that the government was effortful to prevent foreign insurance companies from entering the country illegally and affecting the local economy. He added that there was high possibility of capital flight through illegal operation of insurance business with the country bogged down in a protracted political transition.

Meanwhile, Nepal Rastra Bank (NRB) has also stated that the country has been seeing massive capital flight to India ostensibly to pay for insurance policies issued by Indian insurance companies. Therefore, the central bank has been asking banks and financial institutions to maintain a relatively higher interest rate to discourage money leaving the country.

Addressing the 46th anniversary of Rastriya Beema Sansthan (RBS), Pun said that illegal network firms and insurance sellers operating without a license from the authorised agency had been responsible

for anomalies in the insurance sector. “The government is always effortful to secure the people’s life and property and bring such illegal activities under the legal net,” he added. “I request all the people and stakeholders to always remain alert and stay away from such illegal activities.”    

The finance minister also expressed displeasure over the performance of the state-owned insurance company. “The failure of the corporation to prepare effective business plans and strategies, bring quality

in its service through use of information and technology, come up with an effective group management plan and operate life insurance and

non-life insurance separately as per the Insurance Act has stained the image of RBS,” said Pun. He added that the corporation had also failed to have its transactions audited on time.

Moreover, Pun said that the state-owned insurance corporation should expand operations to the entire country and offer diversified insurance products to sectors like agriculture, animals and services which can cater to the demand of low-income people.

Established in 1967, RBS is the only state-owned insurance company in the country.

 

Source: The Kathmandu Post