The Royal Monetary Authority (RMA) has confirmed that the Royal Insurance Corporation of Bhutan Ltd. (RICBL) and Nubric Capital Private Limited (NCPL) have breached regulations in investment of funds after the Anti-Corruption Commission (ACC) wrote about the issue on December 29 last year.
Following the completion of investigation of the operation of RICBL and NCPL by the ACC, the RMA board of directors convened a special meeting on February 15 to review the findings.
The RMA board after a detailed review of actions undertaken by RICBL and NCPL have not only established that both the companies had violated the RMA regulations but also mentioned in the letter written to ACC that actions will be taken against the two companies.
A copy of the directive issued to RICBL and NCPL, respectively, outlining the measures were send to the chairman of the respective companies on February 27.
RMA directed the RICBL board that the selection process for a new CEO should be conducted in a fair and transparent manner, and the criteria for the final selection should be made available for RMA if required. Along with it, RICBL shall restructure the heads of departments and members of committees within one month of the appointment of the new CEO and as a medium-term strategy, RICBL shall restructure its business model by segregating its insurance and investment business, and further, segregating insurance business into life insurance business, general/non-life insurance business and reinsurance business in particular to ensure appropriate asset-liability management. The RICBL will be provided a timeline up to January 2021 to carry out this particular task.
However, except for reviewing the current board composition, restructuring of heads of departments and members of committee and restructuring its business model by segregating its insurance and investment businesses RICBL is not only required to comply with the directives but also has been asked to submit its action taken report to the RMA within three months from the issuance of the directives by the RMA.
Accordingly, the RMA board has approved to bring NCPL under the regulatory purview of RMA in line with the relevant provisions of the Financial Services Act of Bhutan 2011 subject to the nine terms and conditions.
NCPL shall also reorganize the current composition of the board and submit the revised list to RMA for approval. The company shall review its investment policy and all investments shall be carried out strictly in line with the investment policy duly approved by the NCPL’s board and shall be permitted to invest only in securities.
NCPL will have to comply with the directives within three months from the date of issue of this directive except for investment in securities.
Chencho Dema from Thimphu