Troubled Everest Insurance Company (EIC) had more than 3200 outstanding claims waiting to be settled‚ prompting the regulator to intervene in its management.
“Our inspections revealed that claims related to the company director were paid in advance even before the surveyor reported the damage valuation‚ whereas claims of the general public were always backlogged‚” informed a highly placed official at the Insurance Board (IB) — the insurance regulator.
According to the official there are more than 3200 unpaid claims worth about half a billion rupees. The company’s financials published in May shows that it issued a total number of 8043 policies.
“We could not have allowed such deliberate negligence towards the beneficiaries‚” added the official.
In early October‚ IB had taken over the management of EIC‚ while suspending the company’s directors and dismissing the CEO. However‚ the dismissed parties had filed two separate writ petitions and an appeal at the Patan Appellate Court to revoke the regulator’s move. The court has asked both petitioners and petitionee to be present for hearing on Sunday to give a verdict.
The regulator had first detected a wrong-doing of the seemingly well run non-life insurance company one and a half years ago when it was found to have made payments to an insurance claim worth Rs 40 million made by Himalayan Snax before the surveyor had submitted the final report. Since Himalayan Snax and Everest Insurance are promoted by Khetan Group‚ the regulator grew suspicious and started an investigation and then ordered the company to get back the amount paid as claims.
“After an investigation‚ we found that there were other similar cases of claims related to directors being paid promptly despite the internal auditor’s objection‚ while a large number of legitimate claims of customers were pushed back‚” according to the IB official.
The Patan Appellate Court has issued a stay order on the regulator’s move till October 27‚ meanwhile forbidding the IB deployed management team from engaging with EIC affairs till the final verdict.
The writ petition was filed against IB’s removal of CEO Kebal Krishna Shrestha and suspension of seven board members along with former chairman Rajendra Khetan from being involved in any kind of insurance business for the next five years. In addition‚ the then dismissed board has also filed an appeal for an interlocutory order against IB for taking over the management of Everest Insurance.
“The regulator’s move is completely legitimate and the Insurance Act provides enough legal premise and authority for this action‚” informed the IB official.
Since last year‚ IB had suspended EIC’s fire portfolio until the company got the amount paid to the suspicious claims returned. The management and directors seem to have acted indifferently towards righting their wrong.
Moreover‚ since the beginning of the current fiscal year‚ even the company’s employees have picketed the company‚ accusing the management and board for trying to shut down the company.
source: the himalayan times,25 Oct 2013
LINK
“Our inspections revealed that claims related to the company director were paid in advance even before the surveyor reported the damage valuation‚ whereas claims of the general public were always backlogged‚” informed a highly placed official at the Insurance Board (IB) — the insurance regulator.
According to the official there are more than 3200 unpaid claims worth about half a billion rupees. The company’s financials published in May shows that it issued a total number of 8043 policies.
“We could not have allowed such deliberate negligence towards the beneficiaries‚” added the official.
In early October‚ IB had taken over the management of EIC‚ while suspending the company’s directors and dismissing the CEO. However‚ the dismissed parties had filed two separate writ petitions and an appeal at the Patan Appellate Court to revoke the regulator’s move. The court has asked both petitioners and petitionee to be present for hearing on Sunday to give a verdict.
The regulator had first detected a wrong-doing of the seemingly well run non-life insurance company one and a half years ago when it was found to have made payments to an insurance claim worth Rs 40 million made by Himalayan Snax before the surveyor had submitted the final report. Since Himalayan Snax and Everest Insurance are promoted by Khetan Group‚ the regulator grew suspicious and started an investigation and then ordered the company to get back the amount paid as claims.
“After an investigation‚ we found that there were other similar cases of claims related to directors being paid promptly despite the internal auditor’s objection‚ while a large number of legitimate claims of customers were pushed back‚” according to the IB official.
The Patan Appellate Court has issued a stay order on the regulator’s move till October 27‚ meanwhile forbidding the IB deployed management team from engaging with EIC affairs till the final verdict.
The writ petition was filed against IB’s removal of CEO Kebal Krishna Shrestha and suspension of seven board members along with former chairman Rajendra Khetan from being involved in any kind of insurance business for the next five years. In addition‚ the then dismissed board has also filed an appeal for an interlocutory order against IB for taking over the management of Everest Insurance.
“The regulator’s move is completely legitimate and the Insurance Act provides enough legal premise and authority for this action‚” informed the IB official.
Since last year‚ IB had suspended EIC’s fire portfolio until the company got the amount paid to the suspicious claims returned. The management and directors seem to have acted indifferently towards righting their wrong.
Moreover‚ since the beginning of the current fiscal year‚ even the company’s employees have picketed the company‚ accusing the management and board for trying to shut down the company.
source: the himalayan times,25 Oct 2013
LINK
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