Section 87: Audit of Insurer

1) An insurance company shall, within three months from the date of completion of the Fiscal Year, have to get the external audit conducted.

2) In case the insurance company not complete the auditing within the period referred to in sub-section (1) and makes a request for an extension of time for auditing, stating reasonable cause, the Nepal Insurance Authority may extend the period up to two months

3) The audit report shall include details in case any remarks or irregularities have been found while conducting the audit and, if such remarks or irregularities have been found, whether a reply from the management of the insurer had been obtained or not about such matter.

4) Notwithstanding anything mentioned elsewhere in this section, Nepal Insurance Authority may also prescribe a separate format for the Long Form Audit Report and in such case, the Auditor shall prepare the audit report as per such format and submit it to the Nepal Insurance Authority

5) The insurance company shall, within thirty days of completion of its audit, submit its financial statements to the Nepal Insurance Authority for approval.

6) The Nepal Insurance Authority may, if necessary for discussion about the matters related to financial statement, call for a director or chief executive officer or auditor or other related person, and it shall be the duty of such person to be present in front of the Nepal Insurance Authority in such case.

7) The insurance company shall not submit its report to any authorities except government authorities or publish or call an annual general meeting without submitting its report to the Nepal Insurance Authority as per sub-section (5).

8) The insurer should publish its audited annual financial statement at least 2 times in national-level newspapers and on the suit website.

9) Notwithstanding anything mentioned in any prevailing laws, if the audit of the insurance company could not be conducted even if time had been extended as per sub-section (2) due to the non-appointment of an auditor, the Nepal Insurance Authority may itself appoint an auditor of such insurance company.

10) Remuneration and other expenses of the auditor appointed pursuant to sub-section (9) shall be borne by the concerned insurance company itself

11) Provisions relating to matters that are to be disclosed in the audit report and other provisions related  to the audit of insurance company shall be as prescribed