IB to seek explanation from EIC

KATHMANDU:

The insurance regulator — Insurance Board (IB) — will once again seek an explanation from Everest Insurance Company (EIC) because the company has failed to resume its business since the last three weeks.

“We had inquired with the insurance company regarding its ongoing troubles earlier, but it has yet to provide any explanation,” said chairman of IB Dr Fatta Bahadur KC. “That is why we will send a stern letter to the insurance company’s management and board now demanding a prompt explanation,” he pointed out.

Everest Insurance Company — a non-life insurance company — has shut shop since the last 20 days. The staff at the company are on strike for the last three weeks while the company has also shown

little initiative towards restarting the service.

The regulator has not renewed the company’s operating licence for this year due to the suspension of the company’s fire portfolio. A month back, IB had inquired with the company regarding its strategy for the future as it had not submitted its capital increment plan to the regulator. Non-life insurance companies are supposed to increase their paid up capital to Rs 250 million by the end of the current fiscal year.

Everest Insurance has been suspended since the last one year after it was found to have flouted regulations on 18 different counts. Moreover, according to the regulator, company has not provided satisfactory explanations for its doings for regulator to withdraw the ban.

Back in August, the insurance company had made payments to an insurance claim worth Rs 40 million made by Himalayan Snax before the surveyor had submitted the final report. Since Himalayan Snax

and Everest Insurance are promoted by Khetan Group, the regulator was suspicious of the hasty transaction.

According to the agitating staff, the board and the management of the company are not willing to operate the business and are using the excuse of non-renewal of licence to shut down the company. Employees have asked the company to get its act together and run the business properly.

Back in September 2012 too, Everest Insurance had threatened to close down their business after the Insurance Board promulgated the Corporate Governance Regulation but later withdrew the decision.

The regulation forbade insurance companies to insure firms that had the involvement of their directors and according to Everest Insurance it would kill their business.

Source: THT