(1) Regardless of what is written in the existing law, the board of directors of the insurer shall consist of at least five and at most seven directors including one independent director.
(2) The appointment of directors as per sub-section (1) shall be done by the general meeting of the insurer. But,
(a) Directors shall be appointed by the founder until the first annual general meeting of the insurer.
(b) Before the annual general meeting, if the position of a director other than the director representing an institution or an alternate director becomes vacant, the appointment of the director until the next general meeting can be made by the board of directors of the insurer.
(c) In the case of an insurer whose shares are held by the Government of Nepal, the State Government, any insurer, an organized organization, a company or a foreign insurer, the Government of Nepal, the State Government or such organization may appoint directors in proportion to the number of shares held by them, and in the event of appointing a director, to act in the absence of the director. As far as possible, alternate directors should also be appointed.
(3) More than one person of a family of one house shall not be the director of the same insurer or the same type of insurer.
(4) The board of directors shall appoint at least one independent director from among the qualified and experienced persons as per section 49 and shall inform about it in the first general meeting held after such appointment.
(5) A person elected by the directors by a majority among themselves shall be the chairman of the board of directors. But an independent director cannot be the chairman of the board of directors.
(6) The person appointed to the position of the chairman of the board of directors shall take the oath of office and confidentiality before the chairman of the board of directors and the person appointed to the position of member of the board of directors shall take the oath of office and secrecy before the chairman of the board of directors before assuming the position of director.
(7) If the position of the director becomes vacant for any reason, the board of directors shall appoint a director in such vacant position within thirty-five days until the next general meeting.