Kathmandu: Anti-money laundering investigators have widened their probe into the insurance sector after summoning the CEOs of all 14 life insurance companies for questioning over suspicious brokerage payments allegedly linked to a reinsurance arrangement involving Himalayan Reinsurance and a brokerage firm tied to businessman Dipak Bhatt.
According to insurance executives, the Department of Money Laundering Investigation contacted them through the Nepal Insurance Authority and informed them that investigators wanted to discuss “special matters” concerning “Alliant Broker,” a brokerage company reportedly registered in the name of Bhatt’s mother-in-law.
Several CEOs said they were shocked by the summons because their companies had never directly dealt with the broker and had no known relationship with it.
One life insurance CEO told Clickmandu that he initially assumed only his company had been called in for questioning. However, upon arriving at the department’s office last Friday, he found CEOs from all 14 life insurance companies already present.
According to executives, the Insurance Authority itself coordinated the summons at the request of investigators.
The investigation stems from a broader probe into businessman Dipak Bhatt and alleged financial irregularities involving the insurance and reinsurance sector. Authorities are now examining whether brokerage commissions were improperly routed through Alliant Broker despite the fact that life insurers are generally prohibited from using intermediaries in reinsurance transactions.
Under Nepal’s insurance framework, life insurance companies directly sign reinsurance treaties with reinsurance firms such as Himalayan Reinsurance and Nepal Reinsurance Company. Industry executives say brokers are not legally permitted to act as intermediaries in such arrangements.
However, investigators reportedly discovered that Himalayan Reinsurance internally recorded certain business transactions as having been sourced through Alliant Broker and subsequently transferred brokerage commissions into the broker’s accounts.
“Life insurance companies are not allowed to appoint brokers for reinsurance,” one CEO said. “But investigators found that Himalayan Re had shown Alliant Broker as an agent in violation of that provision and paid brokerage commissions into its account. That is what we were questioned about.”
Executives say their companies had entered directly into reinsurance agreements with Himalayan Re and had no knowledge that any intermediary was being inserted into the transactions behind the scenes.
According to investigators, even business routed through insurance pools was allegedly categorized by Himalayan Re as business originating from Alliant Broker, allowing commissions to be transferred to the brokerage firm.
The probe intensified after investigators began suspecting that some portion of the commissions paid to Alliant Broker may have been distributed to insurance CEOs or other individuals involved in the transactions.
“We directly signed reinsurance treaties with Himalayan Re. There was never any discussion of a broker in between,” another CEO said. “But apparently, the company internally portrayed the business as if it had come through a broker. Once investigators discovered commissions being paid to Alliant, they began treating us as potential suspects as well.”
During questioning, executives reportedly denied having any agreements with Alliant Broker and insisted that Himalayan Re may have independently inserted the brokerage arrangement without informing insurers.
Still, investigators reportedly explored whether any CEOs may have personally benefited from the commission payments.
Executives said investigators even presented detailed breakdowns showing how much commission Himalayan Re had allegedly paid to Alliant Broker for reinsurance business linked to each insurance company.
One executive claimed that even life insurers that had later merged were separately shown in records as having routed business through Alliant Broker despite never using brokerage services.
“All 14 life insurers told investigators the same thing — none of us used brokers for reinsurance,” one CEO said, adding that investigators also collected fingerprints after recording statements.
The investigation appears to have evolved gradually. Initially, the Department of Money Laundering Investigation had formally written to insurance companies asking whether they had any agreements with Alliant Broker or had conducted any brokerage commission transactions.
In its letter, the department requested companies to disclose whether they had signed agreements with Alliant Broker while arranging reinsurance and to provide ledgers or treaty documents if any brokerage transactions had occurred. Companies were also instructed to share the same information with the Insurance Authority.
Life insurers reportedly responded that they had no agreements whatsoever with Alliant Broker.
Investigators, however, remained unconvinced and shifted their focus toward whether individual CEOs may have privately coordinated with the brokerage operation.
Executives later gave formal statements asserting that their companies’ own reinsurance policies explicitly prohibited the use of brokers and that no reinsurance agreements had ever been signed with Alliant.
The statements were reportedly recorded by an investigating officer named Shiva Pokharel.
Financial records reviewed during the investigation show a dramatic rise in brokerage expenses at Himalayan Re in recent years. According to the company’s annual reports, brokerage expenses were just Rs 916.70 in fiscal year 2020/21. That figure rose to Rs 623,275 in 2021/22, then surged to Rs 250.48 million in 2022/23 and Rs 336.26 million in 2023/24.
Of that amount, brokerage commissions linked specifically to life insurance business totalled approximately Rs 294.14 million over the last two fiscal years alone — expenses that industry executives argue should not have existed in the first place.
The controversy has also intensified scrutiny of the Insurance Authority itself, with critics questioning why the regulator failed to detect such practices despite reviewing audited financial statements of the companies it supervises.
Some within the insurance industry are now openly calling for investigators to examine whether officials within the regulator or its leadership may also have ignored or facilitated irregularities.
The broader investigation centres on allegations that funds belonging to Himalayan Re were misused to finance personal share purchases by businessman Dipak Bhatt.
Authorities are investigating claims that money from Himalayan Re, Himalayan Life Insurance, and affiliated entities such as Himalayan Securities and Himalayan Capserv was diverted to settle personal stock transactions.
Bhatt and Sulav Agrawal are also accused of placing share purchase orders worth billions of rupees through Bhrikuti Stock Broking without providing collateral or making payments, while the broker allegedly transferred shares into their accounts regardless.
Investigators reportedly became suspicious after discovering that amounts receivable from Bhatt at Broker No. 55, Bhrikuti Stock Broking, closely matched amounts payable to Himalayan Re, raising concerns that reinsurance company funds may have been used to finance the stock purchases.
In addition to alleged misuse of reinsurance funds, Bhatt is also facing investigations related to insider trading, market manipulation, violations of Nepal’s Securities Act, and offences under the Insurance Act 2079. Authorities are further examining potential money laundering offences tied to the broader financial network surrounding the case.
Investigators say the questioning of life insurance CEOs was intended to help determine how funds routed through Alliant Broker may ultimately have been used.
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