Section 110: Recommendation for Improving Financial Condition of the Insurer

1) If it is observed that there is possibility of causing negative effect to the overall insurance sector while advancing the process pursuant to clauses (a), (b), (c) or (d) of Section 109 due to not achieving the improvement of the insurer taken into control under Section 102, the special management team shall mention this information and prepare a report incorporating the position of the assets and liabilities of the insurer to prevent to creating such situation ad shall submit the report to the Authority.

2) After receiving the report pursuant to sub-section (1), if a negative effect is seen to occur in the entire insurance sector while carrying out management or resolution of such Insurer, and if it is seen that financial condition can be improved if the Government of Nepal invests in such Insurer, the Authority shall recommend such description, along with its opinion, to the Ministry of Finance.

3) In case the recommendation is received pursuant to sub-section (2), the Ministry of Finance may make an investment in share ownership of the insurer to improve the financial position of the Insurer.

4) In accordance with sub-section (3), the Ministry may sell its investment of share ownership through bidding within five years after the achievement of improvement in the financial position of the Insurer.