Kathmandu. Many initiatives have been taken to improve nepal’s insurance sector in the year 2081. Nepal Insurance Authority (NEA) has made several policy arrangements this year for the development and expansion of the insurance sector. The AUTHORITY has issued various directives and circulars in the name of insurers as well as issued various new insurance policies and directed them to implement them.
The Insurance Rules, 2081 have also come into force to implement the Insurance Act this year. A meeting of the Council of Ministers held on February 28 had approved the insurance regulations. The Cabinet approved the regulations 26 months after the Insurance Act 2079 came into force on November 26, 2019. The Insurance Act, 2079 has also been amended through an act designed to amend some acts related to prevention of money laundering and promotion of commercial environment.
Similarly, the Guidelines on Good Governance of Insurers, 2080 have been issued. According to the NRA, this directive has been issued to determine the relationship and responsibilities of the board of directors, shareholders and management of the insurer and to maintain institutional good governance of the insurer for the larger purpose of protecting the interests of the insured. The AUTHORITY has provided life insurers for the current fiscal year 2080. It also directed reinsurance companies to pay a direct share of Rs 81 immediately this year. Eight provisions related to corporate social responsibility (CSR) of insurers have been set. It clearly states what insurers can and cannot do under CSR.
The Insurance Authority has also directed to appoint a full-time actuarial (insurance) analyst for all insurance companies. According to the guidelines issued by the authority regarding the appointment of insurers, life, non-life, micro and reinsurers must appoint at least one insurance analyst.
Similarly, from this year onwards, insurance companies will now have to deposit all the money for insurance claims in the bank account of the person receiving the payment. Issuing the Directive on Prevention of Money Laundering and Financing of Terrorist Activities, 2081, the Insurance Authority has issued a directive to make all payments directly through the bank account. The AUTHORITY has directed the insurance surveyors to update the KYC and made it mandatory for every insurance company to appoint a grievance redressal officer.
Similarly, insurance companies will now have to conduct agent training through electronic system and national identity card has been made mandatory in all types of insurance related transactions from January this year. However, the requirement of the national identity card has not been implemented everywhere.
NeA had directed to collect data of all insurers completely in real-time from June 1. Earlier, nea had been collecting transaction data from the insurers at fixed intervals through the insurance regulatory information management system.
This year, the life insurer has to make a provision to pay the claim of maturity insurance within seven days of the registration of the application. The Insurance Authority has made this arrangement by issuing the Insurance Claim Payment Guidelines, 2081.
The Insurance Authority has made new arrangements for the coinsurance and partial claim payment process of non-life insurers and issued listing guidelines, 2024 for foreign reinsurers and reinsurance brokers. Earlier this year, the first amendment to the Institutional Good Governance Directive 2080 scrapped the provision prohibiting agents from insuring their single family members.
The Insurance Authority has issued the Reconciliation and Arbitration Procedure, 2081 BS and prohibited life insurers from unnecessarily publicising insurance claim payment through the media. The AUTHORITY has directed the insurers to issue agriculture and livestock insurance through the software. NeA has amended and revised the insurance policy for bee, coffee, sugarcane and vegetable cultivation.
The Insurance Authority of Nepal (RBI) has prepared a draft of the ‘Directive on Fixed Assets of Insurers, 2081’ to tighten the purchase of real estate of insurance companies. The Insurance Authority has amended and revised the insurance policy for ginger, turmeric and cardamom cultivation.
This year, the NRA has issued directives to all life insurers to re-approve supplementary contracts that have the facility to bear the expenses related to the treatment of deadly diseases. The insurance company has also directed to set up a special department to discourage money laundering and terrorist financing through insurance. It has been directed to form a specialized department or unit related to AML/CFT.
The Insurance Authority has issued a directive on monetary damage insurance, 2081 bs for the insurance company to issue the banker’s compensation policy. NeA has issued a strategic action plan related to prevention of money laundering. According to the NRA, an action plan has been issued for the insurance sector in line with the National Strategic Action Plan on Prevention of Money Laundering.
Similarly, all insurance companies dealing in life insurance, non-life insurance and reinsurance business have also been directed to set up ‘Investment Management Unit’ this year.
Although there are many policy provisions from the regulator to improve the development and expansion of the insurance sector, the implementation aspect has also been lax. It has been observed that the slow implementation of the monitoring and supervision work from the regulator has not gained momentum.
