KATHMANDU, April 12: The Non-Life Insurance Association of Nepal (NIAN) has urged the Nepal Insurance Authority (NIA) to amend the rule that bars outgoing officials from buying or selling shares of their respective companies for one year after leaving office.
A delegation led by NIAN President Rajendra Malla made the request during a meeting with NIA Chairman Sharad Ojha on Friday, calling the provision impractical.
The NIAN met with newly appointed NIA Chairman Ojha to congratulate him and highlight the policy-related challenges facing the non-life insurance sector. The NIAN office-bearers urged the NIA to amend the existing provision that prohibits individuals from buying or selling shares of their company while serving as a board member and for one year after leaving the position.
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Instead, it requested that NIA members be allowed to sell up to 50 percent of their shareholdings while still in office. NIAN President Rajendra Malla warned that the current share trading restriction disrupts the investment climate and could discourage foreign investment.
The NIAN called Rule 38(1a) of the Securities Registration and Issue Regulations, 2079 BS, impractical. It argued that directors, like other shareholders, are investors and should not face restrictions on selling shares simply because they represent shareholders on the board after being elected by the general assembly.
A delegation led by NIAN President Rajendra Malla urged Insurance Board Chairman Sharad Ojha to amend the provision. NIAN President Rajendra Malla emphasized that, from an investment standpoint, board directors and other shareholders share the same financial interests. He argued that restricting directors from utilizing their investments like other shareholders, despite having invested in the company, is unfair.
The NIAN also raised concerns with the NIA over direct quota allocations to Nepali reinsurance companies. A press release from the board clarified that Section 2 of the Insurance Act, 2079 BS, defines reinsurance as a contractual agreement in which one insurer transfers excess risk beyond its retention capacity to another reinsurer or insurer. Section 80 of the Act reinforces this provision.
During the meeting with NIA Chairman Sharad Ojha, the NIAN’s delegation included President Malla and office-bearers Azad Shrestha, Ramesh Niraula, Bal Krishna Shrestha and Kunal Kayal.