Section 47: Formation of Board of Directors

1) Notwithstanding anything mentioned in prevailing laws, every insurance company shall have a Board of Directors, along with one independent director, consisting of not less than five and not more than seven Directors.

2) The insurance company directors shall be appointed by the general meeting of the insurance company pursuant to sub-section (1).

Provided that,

(a) The Board of Directors should be appointed by promoters until the first annual general meeting.

(b) In the event of any vacancy in the post of a director prior to the holding of the Annual General Meeting, the Board of Directors should appoint the director at the next General Meeting.

(c) In case shares are held by the Government of Nepal or province government or another insurance company or another corporate body or company or foreign insurer. The concerned Government of Nepal or province government another insurance company or another corporate body or company or foreign insurer may appoint director(s) in a number proportionate to the value of the shares held by it. The concerned government of Nepal, province government, another insurance company, corporate body, company, or foreign insurer shall also appoint an alternate director to work without such a director.

3) No two or more persons from the same family can become directors in the same insurance company or a similar insurance company.

4) The board of directors shall appoint at least one independent (professional) director from the persons with qualifications and experience provided under section 49 and inform about such appointment at the first annual general meeting.

5) A director chosen by the directors from among themselves by a majority decision shall be the chairperson of the Board of Directors.

Provided that an independent (professional) director cannot be chairperson of the Board of Directors.

6) The person appointed as Chairperson of the Board of Directors shall take the oath of honesty and secrecy before the Chairperson of Nepal Insurance Authority, and the members of the Board of Directors shall take the oath of honesty and confidentiality before the Chairman of the Board of Directors in the format as provided in annexure.

7) In case the office of the Board of Directors becomes vacant for any reason, the Board of Directors shall appoint another person as a member until the next General Meeting within thirty-five days of such vacancy.