Rastriya Beema Sanstha flouts regulator's directives

KATHMANDU:

Government owned public entity — Rastriya Beema Sansthan — is itself flouting state regulations and the Cabinet’s decision, following the omni present tussle between the employee unions and the management.

The oldest insurance company of Nepal is yet to get balance sheets of last seven fiscal years audited and submit recapitalisation plan. On top of that it is still issuing policies of both life and non-life insurance which was forbidden by the regulator — Insurance Board — 21 years ago. For these very reasons, the regulator has not renewed the licence of apparently the largest insurance company of country.

Moreover, the chances of RBS getting its act together appears to be slim following the ongoing agitation headed by the employee unions at the company, asking for more pecuniary benefits since past three months.

The recent decision of the insurance company’s board to split its business into two separate non-life and life insurance companies has further infuriated the employee unions. The board had decided on the steps to be taken for the separation of the business on August 10 and submitted the report to the Finance Ministry for approval. But the four employee unions active at the company have requested the ministry to annul the meeting’s decision.

“We are not against the separation of the company’s business into life and non-life, but we have strong objection towards the company’s board which bypassed the unions’ involvement in the process,” said a representative of Nepal Rastriya Karmachari Sangathan — one of employee unions at RBS.

“Earlier, they had formed a committee involving the unions which was replaced without informing any of us,” pointed out the employee.

The unions have demanded monetary and share benefits during the split for the existing 160 employees.

“Undertaking audit from last seven years and separating the businesses are the top most priorities if the company wants to survive in the current competitive scenario, but impending forces have even made conducting daily operation difficult,” said administrator at RBS Ram Bahadur Khadka, who had taken office in March, following his selection from the Public Enterprise Directorate Board.

“The unions are not allowing me and the deputy administrator to enter the office since the past few weeks,” he added.

Back in March, the unions at RBS had threatened a shutdown of the company demanding better allowances and other financial assistance. “We negotiated in three heads deciding to provide monthly Rs 1000 as telephone allowance to officers, long-term loan of Rs 3.5 million at three per cent interest rate, and 95 per cent payback of the premium paid for their loan insurance after the maturity,” informed Khadka, adding that for other demands, the company board and management require the approval of the Finance Ministry so the management has asked them to wait.

However, the Finance Ministry has also put conditions of getting the audit completed and separating the business before any negotiation with the unions.

The unions have asked for increment in pension equal to the current salary, and payment of an amount equivalent to three times the salary of the time served in the company as gratuity at the time of retirement, among others.

RBS that started its operation in 1966, collected life insurance premium worth Rs 1.9 billion and non-life insurance premium worth Rs 550 million in fiscal year 20011/12.

Source: THT