KATHMANDU: The Insurance Board (IB) has restricted board members of insurance companies from assuming the position for more than two terms.
Last week, revising a directive on the institutional corporate governance of the insurers, the regulator enforced the provision. A single term of a board member has been fixed at four years.
Similarly, individual board members cannot purchase shares and debentures issued by the insurance companies concerned. They cannot even be involved in the transaction of the company’s shares and debentures for up to one year after the termination of their contracts.
Insurers will have to assess the effectiveness of their annual plans and policies on a quarterly basis. The companies will also have to conduct the due diligence audit every five years and report to the IB within the prescribed time limit.