Section 12A
A Ban May Be Imposed On The Insurance Business
(1) The Board may impose a ban entirely or partially or may cancel any type of business being operated by the Insurer under the Insurance Business in any of the following circumstances :
(a) If the directives provided by the Board time to time regarding the procedures to be followed by the Insurer during the operation of the
Insurance Business has been violated,
(b) If the Insurer provides loan to any corporate body in which any of its Directors or his/her family is working as a Managing Agent or partner or
provides guarantee or security of any kind for any loan provided to him/her by others by violating Section 14,
(c) If the Insurer does not provide information to the Board to be provided pursuant to Section 15,
(d) If the Insurer does not maintain the accounts and record, to be maintained pursuant to Section 19,
(e) If the Insurer does not maintain separate accounts and records to be maintained separately pursuant to Section 20,
(f) If the Insurer does not maintain the fund to be maintained by it pursuant to Section 21 or bears liability of one Insurance Business from the fund
maintained for another business,
(g) If the Insurer does not maintain the compulsory reserve fund to be maintained by it pursuant to Section 22,
(h) If the Insurer accepts the insurance risk without receiving the insurance premium pursuant to Section 27,
(I) If the Insurer does not re-insure pursuant to Section 28.
(2) Before imposing a ban on the Insurance Business of an Insurer pursuant to Sub-section (1), the Board shall provide a reasonable time-limit to
submit clarification to the concerned Insurer clearly stating the reasons for imposing the ban on its Insurance Business.
(3) If the concerned Insurer does not submit its clarification within the time-limit mentioned in Sub-section (2) or the clarification submitted by it is not
found to be satisfactory, the Board may impose a ban on the Insurance Business of the concerned Insurer pursuant to Sub-section (1) and shall publish a notice in
two major newspapers to be published in Nepal for the information of public in general.
(4) During the time period of a ban on the Insurance Business of any Insurer pursuant to Sub-section (3) such Insurer shall make payment of claims of
compensation filed against it as prescribed.
(5) If the ban is imposed in the Insurance Business of any Insurer under this section, the Board may, if it finds the evidence submitted by the
Insurer within the time-limit by stating that the circumstances for imposing the ban on its business existed no longer to be satisfactory, impose a fine as
prescribed and lift the ban.
(a) If the directives provided by the Board time to time regarding the procedures to be followed by the Insurer during the operation of the
Insurance Business has been violated,
(b) If the Insurer provides loan to any corporate body in which any of its Directors or his/her family is working as a Managing Agent or partner or
provides guarantee or security of any kind for any loan provided to him/her by others by violating Section 14,
(c) If the Insurer does not provide information to the Board to be provided pursuant to Section 15,
(d) If the Insurer does not maintain the accounts and record, to be maintained pursuant to Section 19,
(e) If the Insurer does not maintain separate accounts and records to be maintained separately pursuant to Section 20,
(f) If the Insurer does not maintain the fund to be maintained by it pursuant to Section 21 or bears liability of one Insurance Business from the fund
maintained for another business,
(g) If the Insurer does not maintain the compulsory reserve fund to be maintained by it pursuant to Section 22,
(h) If the Insurer accepts the insurance risk without receiving the insurance premium pursuant to Section 27,
(I) If the Insurer does not re-insure pursuant to Section 28.
(2) Before imposing a ban on the Insurance Business of an Insurer pursuant to Sub-section (1), the Board shall provide a reasonable time-limit to
submit clarification to the concerned Insurer clearly stating the reasons for imposing the ban on its Insurance Business.
(3) If the concerned Insurer does not submit its clarification within the time-limit mentioned in Sub-section (2) or the clarification submitted by it is not
found to be satisfactory, the Board may impose a ban on the Insurance Business of the concerned Insurer pursuant to Sub-section (1) and shall publish a notice in
two major newspapers to be published in Nepal for the information of public in general.
(4) During the time period of a ban on the Insurance Business of any Insurer pursuant to Sub-section (3) such Insurer shall make payment of claims of
compensation filed against it as prescribed.
(5) If the ban is imposed in the Insurance Business of any Insurer under this section, the Board may, if it finds the evidence submitted by the
Insurer within the time-limit by stating that the circumstances for imposing the ban on its business existed no longer to be satisfactory, impose a fine as
prescribed and lift the ban.