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Fiscal Nepal The Diplomat Nepal
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Started 1 week ago · Updated 1 week ago

Auditor General Accuses Government of Violating Insurance Law with Microinsurance Program

Photo · diplomatnepal.com

The Office of the Auditor General has accused the government of violating insurance laws by assigning a microinsurance program to the Agricultural Development Bank and Sana Kisan Bikas Laghubitta Bittiya Sanstha. The audit report states that these financial institutions, lacking insurance licenses, were entrusted with implementing microinsurance programs despite legal provisions restricting such activities to authorized insurers.

  • The Ministry of Finance reportedly disbursed a total of Rs 129.226 million to the Agricultural Development Bank and Sana Kisan Bikas Laghubitta for microinsurance implementation.
  • The audit report identified the government's move as legally questionable, contravening existing law and the Microinsurance Directive.
  • Section 24 of the Insurance Act prohibits institutions without official authorization from conducting insurance business and mandates compulsory reinsurance.
  • The Auditor General noted weaknesses in compliance and oversight in the implementation of the microinsurance scheme.
  • The government's action is seen as a violation of Rule 40(5) of the Financial Procedures and Fiscal Responsibility Regulations, 2020.

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Office of the Auditor General Agricultural Development Bank Ltd. Ministry of Finance Jeevan Bikas Laghubitta Bittiya Sanstha

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