KATHMANDU, JUNE 2

Insurance Board (IB) — the regulatory body — issued a circular to insurance firms on Monday directing them to mandatorily obtain PCR reports from any person who wants to buy the coronavirus insurance scheme.

Raju Raman Poudel, executive director of IB, mentioned that PCR report has now been made compulsory to buy the coronavirus insurance plan as a precautionary measure.

"Previously, it was not required but as the number of positive cases is rising every day in Nepal the PCR report is necessary, otherwise insurance firms may collapse under the burden of future claims," he added.

As the number of people being infected by the coronavirus in Nepal has been rising by the day, insurance companies are worried that they may not be able to bear the burden of claims in the future.

"The premiums being collected for coronavirus insurance are very low and the number of people who want to buy this scheme is surging," said Chunky Chhetri, general secretary at Nepal Insurance Association.

"The major problem is that international reinsurance companies have not agreed to reinsure the coronavirus insurance schemes launched by companies in Nepal," informed Chhetri, adding that domestic insurance firms thus will not be able to bear the burden of claims as the government has not been able to effectively control the spread of the virus.

Though the COVID-19 spread across many countries in the beginning of this year, its effect was seen pretty late in Nepal and domestic insurance companies launched insurance schemes against it only last month and many people have been attracted to the plan.

However, since the recent rise in the number of infected people, the companies have started looking into ways on how the new product can be better managed.

Meanwhile, Poudel said that the response to this policy has been extremely positive and even during the lockdown the insurance firms have been conducting awareness programmes on the COVID-19 insurance policy. As per him, more than 227,000 people have taken out corona insurance so far. Since then, insurance companies have collected insurance fees worth Rs 130 million.

Moreover, an arrangement has been made whereby insurance firms must provide the insured amount to the concerned person as soon as the PCR report is positive.

On April 21, the IB had directed insurance companies to provide insurance coverage for coronavirus by charging cheap premiums. It had also directed them to classify this type of coverage under the deadly disease category.

The board has fixed the premium for such insurance coverage at Rs 500 for each individual and Rs 300 for an additional family member for those who take out policies worth Rs 50,000. The board has directed insurance firms to charge Rs 1,000 per person and Rs 600 for an additional family member if the policy is worth Rs 100,000.

As per Poudel, the COVID-19 policyholders are largely individuals.

A version of this article appears in e-paper on June 3, 2020, of The Himalayan Times.