ROLES AND RESPONSIBILITIES OF

BOD

Corporate Governance and Board Governance System

Insurance Co.

Composition

Insiders Senior executives

Outsiders Proxy of shareholders Independent directors

Insurance Regulatory Authority of Nepal

Governing Acts and Regulations Insurance Act 1992 Insurance Regulation 1993

Insurance Companies Life Insurance : 8 Non-life Insurance: 17 Rastriya Beema Sansthan: L/NL

Functions of Insurance Board

To provide necessary suggestions to the Government of Nepal to frame the Policy regarding to systematize, regularize, develop and regulate the Insurance Business.

To frame a policy for the investment of the amount received from the insurance and to prescribe the priority sectors.

To register and renew the Insurer, Insurance Agent, Surveyor and Broker and to cancel or cause to cancel such registration.

Cont…..

To arbitrate in the dispute arises between the Insurer and the Insured.

To make decision on the complaints filed by the Insured against the Insurer regarding to the settlement of liability of the Insurance.

To issue necessary directives to the Insurer from time to time regarding to the Insurance Business.

Cont…..

To formulate necessary basis for the protection of interests of the Insured, and

To do or cause to do other necessary functions regarding to the Insurance business.

Roles of BOD

Representatives of shareholdersAlign the responsibilities of shareholders with

managementDefining company’s mission and goalAppointment of senior management Approve major corporate movesApprove dividends and other financial

matters.Responsible for company’s business affairs

and governance

Duties of BOD

The duty of careThe duty of loyaltyThe duty of good faithThe duty to promote successThe duty to avoid conflict of interestDuty to exercise diligence, judgment, and

skill

Problems arising from ineffective Board Governance

Board members assuming staff responsibilities

Unstructured board meetingWeak board committeeHaphazard selection of new board membersIgnoring the financial implication of decisions

Cases Related to Board Governance of Insurance industry of Nepal

Separation of life and non life Insurance Companies.

One person representing BOD of multiple Insurance Companies

Advance payment against the insurance claimed by Himalayan Snacks and Noodles.

Thank you !