Third Party Insurance may hit snag for want of homework

KATHMANDU: The government´s programme to make third party insurance (TPI) worth Rs 500,000 mandatory for all vehicles from August 17 is likely to face a setback as it has not yet formalised the TPI premium rates.

In a programme organized at the finance ministry here today, Finance Minister Surendra Pandey said Nepal Insurers’ Associaton (NIA) should immediately execute the third

party insurance scheme to provide relief to victims of road accident. Due to traffic accidents, incidents of vandalism of vehicles and road obstructions by bereaved family members are increasing alsong with demands for instant relief. The highway and main supply routes in and out of the Valley keep getting obstructed causing a price spiral.

Nepal Truck and Tanker Entrepreneurs’ Federation (NTTEF) general secretary Rajendra Shrestha said they have already agreed to the new premium rates. “However, if we are not provided the insurance policy, it will be difficult for us to implement it.” He added that since the government has announced the amount publicly, the people will not let NTTEF off the hook.

Transporters argued

that operating vehicles without the new insurance cover would be a blunder because they would neither have the insurance coverage nor would they be

able to escape with low compensation if some misfortune happened.

This delay, said insurers, will affect issuance of new policies on time. Going by the existing practice, the government first endorses the rate, following which the Insurance Board (IB) makes new rates effective. Companies are allowed to pursue the new tariff only after they get the nod from IB.

During the programme minister Pandey voiced the need for implementing animal and crop insurance. Revenue secretary at the finance ministry Krishnahari Baskota urged the insurance companies to promote their business in rural areas as well and added that they should be transparent in whatever they do.