Insurance sector managing Rs 10 trillion in savings fails to make it to government's priorities
The Nepal Insurance Authority has been without an executive chairperson for over a year. The government has kept this organized sector, which manages more than Rs 10 trillion in savings, leaderless for a long time, seriously affecting policy decisions and regulatory work.
Kathmandu — It has been more than a year since the Nepal Insurance Authority has had an executive chairperson. The previous government's meddling in the selection of the Authority's leadership for certain interest groups has resulted in the current state of stagnation. The current so-called 'superfast' government, which is close to a two-thirds majority, is also dithering on appointing the Authority's chairperson.
After Sharad Ojha was dismissed from his post amid controversy, the Authority has been running under the leadership of an illegal chairperson. The government has been running the Authority's board of directors on the strength of a joint secretary appointed to represent the Ministry of Finance and, more recently, a representative from a ministry not even provided for in the Insurance Act 2079. Contrary to the legislative intent embodied in the Insurance Act 2079, the government has made a mockery by arbitrarily appointing a ministry representative as chairperson.
After widespread criticism that the appointment of the Insurance Authority's chairperson was not a priority for the government, the government formed a recommendation committee headed by the Vice-Chairman of the National Planning Commission as per the provisions of the Insurance Act. The deadline for submitting applications was June 20 (Jestha 20) last, but the committee has made no progress beyond reviewing the applications received. The committee must prepare a shortlist based on the applications, conduct written and oral presentations, and finally submit the names of three candidates, including an alternate, to the Council of Ministers.
Before the committee could make its recommendation, the line ministry, the Ministry of Finance, shelved the appointment process and on August 3 (Shrawan 18) formed a three-member study and recommendation committee headed by retired civil servant Sushil Kumar Ojha to study the problems and suggestions of the insurance sector. This has further delayed the appointment process. Only 18 days remain before the 90-day term of the recommendation committee expires, and ten of those days will be spent during the Dashain holidays.
According to the unaudited financial statements of life insurance companies for fiscal year 2082/83, the life insurance fund stands at Rs 942.63 billion. Adding public capital investment and reserve funds in non-life insurers, life insurers, reinsurers, and micro-insurance companies, this amount exceeds Rs 10 trillion. The government has kept the insurance sector—an organized sector that manages such a large volume of public capital and contributes to the economy—stuck in a leaderless state for a long time.
It is speculated that the chairperson appointment process will not move forward until the study committee submits its report. "Currently, even the Authority's board meetings are not being held regularly," an official of the Nepal Insurance Authority said. "Policy decisions are being deferred on the pretext that the new person will handle them." The government will likely decide on this matter either before Tihar at the earliest or after Tihar at the latest.