Print Edition - 2015-01-21 | MONEY
IB adopts strict measures for share transaction
Jan 20, 2015-
Shareholders of insurance companies will have to take the Insurance Board’s (IB) approval to sell or buy more than 1 percent stake. Officials said the IB adopted such an stringent measures after companies did not bother to inform about big share transactions to the regulator.
“The regulator should know who would be new shareholders in insurance companies,” said IB Director Shreeman Karki.
One month ago, promoters of the IME Group and Hathway Investment together bought a 45.5 percent stake in troubled NB Insurance, and the transaction was not reported to the regulator. This incident too prompted the board to come up with the latest provision, said another IB official.
Insurance company promoters, with more than 1 percent stake, will have to take IB’s permission if they need to take loans against the shares. Also, the promoters cannot take loans of more than 50 percent of the face value of the shares.
If a shareholder is blacklisted for defaulting loans, the insurers have to inform the IB within 15 days. The insurers should mention in their financial statement about any loan taken by the promoters against shares. The insurance companies should also adopt necessary measures to manage possible risks that could arise due to the loans taken by the promoters.
In the event of a promoter’s death, the company concerned should transfer the ownership of the promoter’s shares to the nominees specified, and inform about it to the regulator within 15 days. The IB should also be informed about transaction of shares among the promoters.
New directives on livestock
The Insurance Board (IB) has issued new directives to insurance relating to livestock farming. According to the IB, insurance companies will cover losses that could take place due to fire, lightening, earthquake, flood, landslide, hurricane and hailstorm, accidents, and health diseases as specified by the insurers. However, the companies would not be compelled to pay the insurance amount if the animals are deliberately killed, they suffer from bird-flu, theft or lost. The insurers will cover the losses only if the animals die due to accidents within a radius of 1km. In the case of birds, the area limit has been kept at 50m. An IB source said the new measures is in line with the international practice. Policy can be transferred if the insured animals are sold.
Published: 21-01-2015 09:39