Kathmandu. The Office of the Auditor General has pointed out the involvement of non-life insurers in the misuse of subsidy money in agriculture and livestock insurance.
In its 62nd annual report, the Auditor General has stated that insurance companies have demanded more subsidy by increasing the sum assured in the insurance subsidy.
According to the Auditor General, there have been problems in the verification process of the details submitted by the Insurance Authority of Nepal in the grant of agricultural insurance fee, lack of effective coordination between the Department of Animal Services, Department of Agriculture and insurance authority.
Also, in the 61st annual report of the Auditor General, the non-life insurer had claimed a grant of Rs 4.18 billion in the fiscal year 2079/80, while the Department of Agriculture and Animal Husbandry examined the details submitted by the insurer. That is, 17 percent of the insurance claim was rejected by the department.
Irregularities in foreign-funded programs:
The Insurance Authority had filed a complaint against the insurance authority for misusing the insurance subsidy by maintaining a higher number of plants in the proposal form while issuing the insurance policy on the weather index while insuring apple cultivation under the insurance based on the spice index towards agricultural insurance. Following the complaint, the NRA had written a letter to the Crop and Livestock Insurance Fund Management Committee on February 1, 2018, requesting it to withhold the grant amount. After receiving the letter from the NRA, the committee’s meeting held on February 15, 2018, had kept Rs 58 million under consideration as the remaining grant to be paid to the insurer.
Suggestions to maintain reliability:
The Auditor General’s office has suggested developing automated data cross-verification (reliability test) and taking legal action against insurance companies for submitting false insurance details to prevent insurance companies from claiming more than the actual amount.
A coordinated action plan should be prepared and implemented among the Crop and Livestock Insurance Fund Management Committee, Department of Agriculture and Livestock Services, Insurance Authority and local levels.
The Auditor General has also suggested to increase the effectiveness of the insurance program by implementing the suggestions including implementing strict monitoring and action system to prevent misuse of grants and giving responsibility of implementing and monitoring the insurance program to the state and local levels.
