November 8: The Insurance Board, which has been regulating the insurance sector of Nepal, has been transformed into the Insurance Authority effective from Tuesday, November 8. With the implementation of the Insurance Act 2079, all the works of the Insurance Board will now be undertaken by the Insurance Authority.

The Insurance Bill 2079 which was passed by both the houses of the Federal Parliament about two months ago was authenticated by President Bidya Devi Bhandari on October 8. As per the constitutional provision that any law comes into effect one month after being authenticated by the president, the Insurance Act 2079 is being implemented from November 8.  An official announcement will be made about the transformation of the board into the authority on the same day.

As per the provisions in the Insurance Act, the chairman and directors of the Insurance Board will retain their posts and lead the newly-formed authority. Likewise, the employees of the board will perform all the works of the authority.

Surya Prasad Silwal, chairman of the authority, said that a new era has started in the insurance sector of Nepal after the implementation of the new Insurance Act. "The Act of 2049 has not been able to cover the latest developments in the insurance sector," he said.

He claimed that the works related to insurance will be done quickly and effectively from now onwards because the new Insurance Act has provisions that give autonomy to the Insurance Authority and the chairman has been authorized to take necessary decisions.

 The new act also has a provision to establish an insurance development fund to increase access to insurance in rural areas as well as among the poor and underprivileged. It has also reduced the regulatory fee that the insurance companies have to pay.

Until now, the insurance companies had been paying  regulatory fee equivalent to 0.75 percent of the total premium collected by them. But now onwards, they have to pay regulatory fee equivalent to 0.5 percent of the insurance premium. Likewise, the new act also has strict provisions related to offences related to the insurance sector. The Insurance Authority has been a uthorised to fine between Rs 50000 to Rs 150000 per day to the insurance companies that do not follow its directives.

The then Finance Minister, Yuvraj Khatiwada, had registered the Insurance Bill in parliament four years ago to amend and consolidate laws related to the insurance sector. However, the discussion on the bill was halted for a long time after a dispute regarding the continuity of the terms of the chairman and directors of the insurance board surfaced. The parliamentarians submitted 85 amendments to the original bill while the finance committee amended 124 points and submitted it to the parliament.