New fillip to insurance policy
Kathmandu, April 18:
In an attempt to make the insurance sector competitive and vibrant, the government is all set to introduce major amendments to the existing insurance policy by next month. The new policy is expected to help the insurance market to grow, especially after Nepal’s entry into the World Trade Organisation. It will also provide sufficient ground for market players in both life and general insurance segments, with clear rules and regulations. “The first phase in amending the policy has already been completed and we are reviewing it for further necessary changes. The final draft will be ready by early next month,” said Madhav Prasad Upadhaya, chairman of Insurance Board (IB), a regulatory authority of insurance in the country. The new policy will be more practical and issues regarding auto tariff, third party insurance and surveyors’ category would be addressed properly, he informed. The new policy is expected to bring uniformity among surveyors. There are four categories of insurance surveyors right now and their work-frame is separated by the claim amount. The amendments propose to merge all nature of work of all the four categories.
“Under the present dispensation, the top category of surveyors are finding it difficult to cope up with the increased workload, because of which the claim procedure gets delayed. To expedite customers’ insurance claims, we are making the surveyors categories uniform,” said Upadhaya. Third party insurance lacks solid rules which has been often creating disputes. The third party insurance policy with no fixed claim amount needs proper addressing. The new policy is also expected to address issues regarding the claim amount of third party insurance. Likewise motor insurance tariff will also be reviewed and is likely to increase, said Upadhaya. Upadhaya said that companies who bear a tag of ‘wilful defaulters’ from banks will be barred from doing business in the insurance sector. The status of companies which already
are in the insurance sector will also be reviewed, he added.
The insurance market of the country has grown rapidly after restoration of democracy in 1990 and with liberalisation of economy. Today, seventeen insurance companies are registered in Nepal. The insurance premium collected in the fiscal year 2002-03 was Rs 3.63 billion, outstripping the insurance premium of Rs 2.92 billion collected in 2001-02. The insurance industry’s contribution to gross domestic products also increased from 1.20 per cent to 1.44 per cent in corresponding years. The importance of the insurance industry for the economical development of the country has been felt with its large contributions to national savings, developing money market and contribution to important national infrastructure.
Kathmandu: South Asian Insurance Regulators Forum (SAIRF) — a SAARC-level insurance regulatory bodies organisation, is organising a meeting in Kathmandu later this week. The meeting would be a kind of an experience-sharing platform to solve problems related to the insurance sector. Six countries of the SAARC region are participating in the meeting. The SAIRF meeting would be beneficial to Nepal to figure out challenges that the insurance sector faces in a post-WTO scenario, allowing it to reinforce its insurance system accordingly. —HNS