IB to conduct DDA of troubled NB insurance company

ShareSansar, December 9:

The Insurance Board (IB) has decided to step in to conduct the Due Diligence Audit (DDA) of NB Insurance Company Limited after the non-life insurer turned a deaf ear to the repeated directives issued by the regulator for the same.

Issuing a notice yesterday, the IB has stated that now it will conduct the DDA for the troubled insurance company.

The IB had first asked the insurance company to conduct the DDA back on September 19 after it received complaints that NB was indulging in financial irregularities.

Irked by the failure of the insurance company to carry out reforms advised by the regular over the last one and a half years, the IB had last month written to Nepal Rastra Bank to freeze all the accounts of the insurance company.

The insurance company was first spotted in financial mess back in February last year  after it made a controversial payment of Rs 5.9 crore to a certain party as the rent amount without even consulting the IB.

Any insurance company must get the approval from the IB for any expenditures above Rs 20 lakh.

Later the regulator also came to know, through its investigation, that NB insurance had misappropriated more than Rs 7 crore from its reserve.

This prompted the regulator to immediately suspend the operating license of NB Insurance for two months in last July.

Earlier this year, the IB also asked the insurance company to carry out a due diligence audit to ascertain the financial position of the insurer.

As per IB’s regulation, the troubled insurance company, which has a paid up capital of Rs 14.1 crore , and it has to soar it to Rs 25 crore.

It may also be noted  here that NB insurance company had posted a loss of Rs 4.4 crore in last fiscal year 2069/70.