The Insurance Board (IB) has decided to take over the
management of the Everest Insurance Company by dissolving its board and
suspending its CEO, Kebal Krishna Shrestha. It is the first time that the
board has taken over the reins of any insurance company in the country.
Taking control
insurer’s management, the board has also barred the company’s former chairman
Rajendra Kumar Khetan and his family members as well as current board members,
whom the board identified to have violated the directive of the board leading
to takeover from the IB, from holding any position in the insurance company for
the next five years.
The IB is sending a
three-member team led by Chartered Accountant Santosh Prasai to take over the
management of the insurer on Thursday. Other members of the team are IB’s
Deputy Director Kundan Sapkota and Assistant Director Om Bahadur Adhikari.
The board has also
formed an advisory committee headed by Suraj Bikram Shahi, an insurance expert
at the IB, along with another expert Bhoj Raj Sharma. Other representatives
will be appointed later as required, to work as board of directors in the
company.
Everest Insurance
plunged into trouble after the then management paid a claim worth around Rs 40
million to Himalayan Snax, the manufacturer of Mayos noodles, without receiving
the final report from the surveyor. The IB then slapped
a monetary fine on the company and stopped the company from taking in
insurances against fire. In response, the company stopped the entire business.
After the
company was found guilty of honouring the claim through illegal settlement, the
regulator had initially barred the company from issuing new policies. However,
the IB later on limited its action against the company to restrict it only on
the fire insurance after its employees resorted to protest, disrupting the
company’s settlement work.
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