Kathmandu, May 12

Insurance sector regulators of South Asia have been urged to enhance cooperation and share best practices to enhance their regulatory and supervisory framework, enhance insurance outreach and insurance literacy.

Addressing the two-day third South Asian Insurance Regulators’ Meet and International Insurance Conference, 2016, which commenced here, today, Finance Minister Bishnu Paudel stressed on the need to introduce easily accessible insurance service for the people in South Asia. “This is because a majority of the countries here face common challenges like illiteracy, rampant poverty, retarded economic growth and lopsided social sector development.”

Enhancing quality of insurance, according to the finance minister, could be ‘one of the instruments that would potentially reduce the risk of vulnerability for our (South Asian) society as they have been facing frequent natural calamities like landslides, drought, floods, destructive earthquakes, among others’.

Minister Paudel emphasised on exploring the avenues to extend both the coverage and quality of insurance, making it accessible for those who actually need it to ensure their participation in line with the speed of economic development in the region.

Sharing Nepal government’s initiative of crops and livestock insurance, in which the government is providing huge premium subsidy to farmers to lure them towards buying insurance policy for protection against a variety of risks, Minister Paudel said that sharing of best practices would also be beneficial for the insurance practitioners in the region.

He also informed that Nepal government has been framing legal and institutional framework to gradually roll out health insurance programmes for all citizens in the near future.

Addressing the programme, Bijay Bahadur Shah, president of Nepal Insurers Association, said that the insurance companies in the country have settled 93 per cent of the earthquake-related claims (in terms of number of claims) within a year of the Gorkha earthquake of last year. “The devastating earthquake of last year was a reminder of the importance of the insurance sector for risk minimisation.”

Also speaking at the programme, Dirk Steffes-enn, first secretary (Development) at the Embassy of Germany in Nepal, highlighted that the global knowhow of the insurance sector supports enhancement of regulatory and supervisory framework as well as designing of products for the insurers. To address the country-specific requirements, Nepal needs to focus on micro-insurance since a larger number of the population falls under the bracket of low-income group, he added.

Arup Chatterjee, principal financial sector specialist of the Asian Development Bank (ADB), opined that the insurance sector regulators should focus on innovation, inclusion and integration while developing regulatory and supervisory framework for insurers. Regulators need to streamline regulatory practices keeping in mind the risk characteristics of product, channel and market, according to him. “Promotion of regional best practices and following the insurance principles are imperative for financial service providers, regulators and consumers.”