News of Insurance – Violating regulatory deadlines, insurance companies in Nepal have been delaying their dividend announcements, putting investor returns at risk. Despite positioning themselves as corporate entities, many insurance companies fail to adhere to proper corporate governance practices. As a result, they have been postponing dividend declarations, disregarding policy guidelines.

According to the Insurance Act, 2049 and Company Act, 2063, companies are required to conduct their annual general meetings (AGMs) and declare dividends within six months of the fiscal year-end. However, even two months past the deadline, many insurance companies have yet to announce their dividends for the fiscal year 2080/81. So far, only 12 insurance companies—six life insurance and six non-life insurance firms—have declared dividends.

Violation of Regulatory Obligations

Insurance companies have failed to submit the necessary financial reports on time, raising questions about regulatory discipline. Missing deadlines not only undermines investor confidence but also casts doubt on the credibility of the insurance sector.

Questions Over the Regulator’s Role

By regulatory standards, insurance companies should have announced their dividends by Asar 2081. However, as of Chaitra 2081, several companies have yet to complete the required procedures, prompting concerns over the Nepal Insurance Authority’s oversight. Despite having the authority to penalize companies for such delays, no action has been taken so far.

Executive Director Sushil Dev Subedi of the Nepal Insurance Authority cited actuarial evaluation procedures as the reason behind the delays. He stated that compared to previous years, more insurance companies have already declared dividends this year, and efforts are underway to ensure all companies meet deadlines in the future. Subedi emphasized that investigations into delays would determine whether they stem from genuine circumstances or intentional negligence before imposing penalties.

Companies That Have Declared Dividends

1. Shikhar Insurance: Declared a 10.5263% dividend, including 10% bonus shares and 0.5263% cash dividend for tax purposes. The company conducted its 20th AGM on Falgun 13.
2. Citizen Life Insurance: Announced a 28.4% dividend, including 26.98% bonus shares and 1.42% cash dividend.
3. IME Life Insurance: Approved a 21.05% cash dividend, including taxes. The company has completed its AGM.
4. Nepal Life Insurance: Distributed a 21.05% dividend, including 10% bonus shares and 11.5% cash dividend. The 25th AGM was held on Magh 28.
5. Himalayan Everest Insurance: Declared an 8.75% cash dividend, including tax. The company has conducted its AGM.
6. IGI Prudential Insurance: Announced a 9.736% cash dividend, pending regulatory and AGM approval. The 27th AGM took place on Falgun 25.
7. Himalayan Life Insurance: Approved a 14% bonus share distribution, passed during its 17th AGM on Falgun 19.
8. SuryaJyoti Life Insurance: Announced a 20% cash dividend.
9. Nepal Insurance: Declared a 15% bonus share and a 0.79% cash dividend for tax purposes. The 76th AGM is scheduled for Chaitra 19.
10. Siddhartha Premier Insurance: Announced a 30% cash dividend from last year’s profits. The 31st AGM was held on Falgun 15.
11. Sanima GIC Insurance: Declared a 7.5% bonus share and 0.3947% cash dividend. The company will close its books on Chaitra 8 and hold its AGM on Chaitra 21.
12. Sanima Reliance Life Insurance: Approved a 9.2489% dividend, including 1.2489% bonus shares and 8% cash dividend.

While some companies have fulfilled their dividend obligations, many others remain non-compliant, raising concerns about corporate governance and regulatory effectiveness in Nepal’s insurance sector.