The unions were upset that the new company had issued the employee selection notice instead of RBS, and prevented it from beginning service even though the chief executive officer had been appointed. The Cabinet had decided to break up the state-owned enterprise four months ago.

The employees had demanded that RBS issue a public notice calling those wishing to transfer to the new company to apply as they were unsure about its status and properties and the benefits they would be getting.  

“Since the assets and liabilities had not been transferred to the new company, we were not sure about its status. So we had asked that RBS itself issue a notice for transfer of employees to the new company,” said Tulak Prasad Dhungana, central committee member of the RBS Employee Union, who chose to remain with the original company. “After the demand was addressed, we allowed the new company to operate independently.”

Chief executive officer of the new company Ramesh Raj Bhattarai did not wish to talk much about how the employees had allowed it to begin services. Visibly happy that the standoff had been resolved, Bhattarai talked about what the company was doing and its future plans.

“After the company came into operation last week, we have settled 20 pending claims related to vehicle and marine insurance,” said Bhattarai. “We are clearing four to five claims on a daily basis,” he added.

The company’s first priority has been to manage its human resources. Currently, RBS staff assigned to the new company have been running it. There are 68 employees currently working in the new company.

“We are now formulating the employees’ regulation and economic regulation to address staff management issues,” said Bhattarai. RBCL aims to employee the current staff of RBS with the same benefits they are currently enjoying. “We will hire new experts only if they are required,” said Bhattarai.

He said his next priority would be upgrading the software to ensure efficient services to clients. “Besides, we have planned to introduce a new business strategy to retain the current share of the company in the non-life insurance business and expand the business amid vigorous competition in the market in recent days,” he said.

RBCL has an authorized capital of Rs 500 million and a paid-up capital of Rs 350 million. The government owns 41.03 percent of the company’s shares, the Employees’ Provident Fund 19.37 percent, Nepal Bank 9.6 percent and the public the rest.

The RBS management had a hard time convincing its employees that the company needed to be broken up as it was illegally operating both life and non-life insurance businesses.

The Insurance Act prohibits insurance companies from conducting both types of businesses. However, RBS had continued to sell both types of insurance in defiance of the insurance board claiming that it was governed by its own separate act.

Continued pressure from the government and the regulatory body, which refused to check its audit report, eventually forced the employees to agree to a split, and a new company was formed to deal with non-life insurance.