The Nepal Insurance Authority (NIA) has taken disciplinary action against seven insurance companies—three life insurers and four non-life insurers—for breaching regulatory requirements and provisions outlined in the Insurance Act.
The companies facing action include Asian Life Insurance, Himalayan Life, Nepal Life Insurance, The Oriental Insurance, Himalayan Re-Insurance, Alliant Re-insurance Brokers Pvt Ltd, and Neco Insurance. The decision was made during a board meeting held last week.
Among life insurers, Asian Life Insurance was found to have violated Section 67 of the Insurance Act by purchasing shares in City Hotel in a manner that conflicted with rules governing conflicts of interest and related-party involvement. Himalayan Life breached guidelines related to executive compensation, including salary and benefits of its CEO. Meanwhile, Nepal Life Insurance was penalized for failing to provide requested information to the regulator.
In the non-life segment, Neco Insurance was cited for issuing insurance policies without obtaining prior regulatory approval. The Oriental Insurance, Himalayan Re-Insurance, and Alliant Re-insurance Brokers were investigated over their involvement in the reinsurance arrangements of Hilton Hotel.
The case also involves Surendra Thapa of Nepal Reinsurance Company, who was questioned regarding the Hilton Hotel reinsurance deal. The hotel had been severely damaged in an arson incident during the Gen Z movement. Regulations require that reinsurance for risks related to vandalism and terrorism be handled exclusively through NRIC. However, authorities found that the policy was initially placed with Himalayan Re-Insurance before being transferred to NRIC after the incident.
The NIA has imposed a cash penalty of Rs 200,000 on each of the involved companies and individuals.
