👉 “Incorporating amendments made up to the end of Shrawan, 2082 B.S.”
Part – 1
Preliminary
Section-1: Short Title, Extent and Commencement:
1)
This
Act may be called the “Insurance Act, 2079 (2022).”
2)
This
Act shall extend to the whole of Nepal and shall also be applicable to the
branch offices established by an insurer outside Nepal.
3)
This
Act shall come into force on the thirty-first day from the date of its
authentication.
Section-2: Definitions: Unless the subject or the context
otherwise requires, in this Act,
a.
“Chairperson” means the Chairperson of the Board of
Directors referred to in Section 6.
b.
“Other
Insurance Service Provider”
means any person or institution, other than an insurer licensed to carry on
insurance business or an insurance intermediary, who has obtained permission
from the Authority to carry out insurance-related activities.
c.
“Principal
Shareholder”
means any person, company, or institution holding one percent or more ownership
of the issued capital of an insurer; and the term also includes a family where
members of the same family separately hold one percent or more shares.
d.
“License” means the license issued under this
Act to carry on insurance business, and the term shall also denote the license
issued to an insurance intermediary or other insurance service provider to
carry out prescribed functions.
e.
“Family
of the Same Household”
means the husband or wife, son, daughter-in-law, daughter, adopted son, adopted
daughter, father, mother, step-mother, and any other person maintained by or
maintaining the concerned person.
f.
“Chief
Executive”
means the Chief Executive Officer appointed under Section 57 who is responsible
for the administrative, managerial, or business operations of the insurer.
g.
“Net
Assets” means the amount
remaining after deducting the issued capital, reserves, funds, or retained
earnings attributable to shareholders, and in case of loss, the accumulated
loss as well, from the total assets of the insurer currently held, except for
the liabilities of the insurer.
h.
“Life
Insurance”
means the contract made by an insurer with the insured under which, on the
basis of the insured person’s age, upon the payment of a lump sum or periodic
premiums, the insurer shall pay a specified amount to the insured, to a nominee
designated by the insured, or, in case of the insured’s death, to the nominee
specified in the insurance policy, to the person desired by the insured, or to
the legal heir of the insured.
i.
“Third
Party Facilitator”
means a licensed insurance intermediary who works as a medium between the
insurer and the insured for carrying out insurance operations.
j.
“Prescribed”
or “As Prescribed”
means as prescribed in this Act or in the rules or bye-laws framed under this
Act.
k.
“Close
Relative” means the
members of the same household or father-in-law, mother-in-law, brother, sister,
sister-in-law, brother’s wife, daughter-in-law, wife’s brother, wife’s sister,
brother-in-law, uncle, aunt, maternal uncle, maternal aunt, maternal uncle’s
wife, maternal uncle’s son, maternal uncle’s daughter, paternal aunt, paternal
uncle, nephew, niece, and also the husband, wife, son-in-law, or
daughter-in-law of such relatives.
l.
“Non-life
Insurance”
means insurance other than life insurance and reinsurance; and the term also
denotes the contract made by an insurer with the insured under which, upon the
payment of premium mentioned in the insurance policy, the insurer accepts the
risk relating to any property or liability and agrees to provide a specified
amount of compensation or indemnity.
m.
“Reinsurance” means the contract made by an insurer
with a reinsurer or another insurer under which the reinsurer or such other
insurer undertakes the portion of risk exceeding the limit borne by the insurer.
n.
“Proposed Insurance Company” means a
public limited company proposed to be incorporated under prevailing laws with
the objective of carrying on insurance business.
o.
“Authority” means the Nepal Insurance Authority
as referred to in Section 3.
p.
“Insurer” means an insurance company or a
reinsurance company licensed to carry on insurance business under this Act.
q.
“Insurance
Agent” means a person
or institution, other than an employee of the insurer, who is licensed as an
insurance intermediary to act on behalf of the insurer on a commission basis.
r.
“Insurance
Contract” means a written
agreement concluded between an insurer and an insured under which the insurer
undertakes the risk subject to the terms and upon the payment of the stipulated
premium.
s.
“Insurance
Broker” means a person
or institution licensed as an insurance intermediary to operate as an insurance
broker in relation to insurance business.
t.
“Insurance
Pool” means a permanent
collective insurance fund established by insurers for the purpose of jointly
bearing risks of a specific nature of insurance, collecting premiums in one
place, arranging reinsurance, and managing claim settlement.
u.
“Insurance
Intermediary”
means an insurance agent, insurance surveyor, insurance broker, third-party
facilitator, or any other insurance intermediary as prescribed, licensed by the
Authority.
v.
“Insurance
Business” means the life
insurance business, non-life insurance business, or reinsurance business.
w.
“Actuary” means a person who has obtained the
designation of actuary from a recognized institution to evaluate the assets and
liabilities of an insurer.
x.
“Insurance
Policy” means the
insurance document issued by the insurer to the insured upon acceptance of a
certain risk.
y.
“Insurance
Surveyor” means a person
or institution licensed as an insurance intermediary to assess damaged property
or liabilities.
z.
“Premium” means the amount to be paid by the
insured to the insurer either in lump sum or in installments as consideration
for undertaking the insurance.
aa.
“Insured” means the person who enters into an
insurance contract; and the term also includes a person entitled to receive
benefits under the insurance policy.
bb. “Bonus” means the share of profit or amount
provided to the insured under life insurance on the basis of the insured sum.
cc.
“Ministry” means the Ministry of Finance of the
Government of Nepal.
dd. “Micro-Insurance” means the insurance carried out under
Part 8 targeting individuals or groups with low income, and those economically,
socially, and geographically marginalized.
ee. “Auditor” means an auditor licensed under the
prevailing law to carry out auditing.
ff.
“Related
Interest” means the
situation where the following persons, firms, companies, or organized
institutions are connected with the insurer:
(1)
A
director, principal shareholder, chief executive, or a member of his or her
family of the same household;
(2)
A
firm, company, or organized institution having the authority to appoint a
director;
(3)
A
director, chief executive, or a member of the same household of a person of the
firm, company, or organized institution referred to in sub-clause (2); or
(4)
If
the person, firm, company, or organized institution referred to in sub-clause
(1) or (2) holds ten percent or more of the issued capital of any other firm,
company, or organized institution, then such firm, company, or organized
institution.
gg.
“Foreign
Insurance Company”
means an insurance company licensed to carry on insurance business in a foreign
country and, having obtained a license under this Act, carrying on insurance
business in Nepal.
hh. “Managerial Level” means a manager involved in the decision-making
process regarding the operation and management of an organized institution; and
the term also includes a person holding the position of chief manager or
manager of any branch or unit of an organized institution with ultimate
responsibility or authority, as well as the second-tier or next lower
managerial levels.
ii.
“Board
of Directors”
means the board of directors of an insurer constituted under Section 47.
jj.
“Interest” means the interest of the director of the
Authority and shall also include the Chairperson.
kk.
“Board” means the board of directors of the
Authority constituted under Section 6.
ll.
“Collective
Insurance Fund”
means a collective insurance fund (insurance pool) established by insurers for
the purpose of jointly bearing risks of a specific nature of insurance,
collecting premiums in one place, arranging reinsurance, and managing claim
settlement.
mm.
“Permanent
Residential Permit”
means a visa, permanent resident status (PR), or green card issued by a foreign
country to a Nepalese citizen to reside permanently in that country, and the
term also includes any permit granted to a Nepalese citizen for permanent
residence abroad under any other name.
