- Parbat Karki
Introduction
Insurance can be defined differently in different dimensions depending on its origin, sectoral legal and usage. However, a part of the financial system, which obtains a limited fee as an artificial person by obtaining permission from the regulatory body, is an economic, social, legal, technological, financial and managerial document to manage risk on the basis of predetermined conditions and restrictions.
Insurance is a contract agreement between the insured or insured party and the insurer to provide personal, family, social, financial, project and commercial financial assurance by mobilizing resources through risk analysis through crowdfunding, managing financial uncertainty.
The world insurance system consists of insurance policies, insurance structures, regulatory systems, international regulatory bodies, reinsurance companies, multinational companies and transnational risk management structures operating in different countries around the world. It is the basis of economic growth and economic development through balancing economic stability by providing economic security to people, property, businesses and projects around the world, enhancing the investment environment, enhancing the quality of life, mobilizing financial resources.
In the world, the word insurance originated in the French and Latin languages ‘insurance’ and ‘secures’.
Functional starter of insurance
Antiquity: In 3000 B.C.E., sumerian and Babylonian civilizations used to share risks mutually when traveling long distances to trade with camels.
Medieval: 14th century Marine risk management of businesses using sea routes begins.
Modern insurance: The concept of underwriting was developed from London in 1688 and the risk assessment of pre-existing uncertain risks is determined by marine insurance.
Insurance system in Nepal
Insurance is the service provided by an insurer registered as a legal person in accordance with the Companies Act, 2063 and licensed to do insurance business according to the Insurance Act, 2079 and the service provided according to the Health Insurance Act, 2074. Insurance is the act of facing future uncertainty by assessing the risk of the customer’s or customer’s property through the proposal form and various tests of the concerned parties and collecting the insurance fee in the form of fixed service charge within a limited scope. Insurance is also a facility available to the citizens of the country under the Health Insurance Act.
The development of insurance business in Nepal has taken place with the development of human civilization through informal means such as support to the members in uncomfortable situations by providing donations, donations, and alms collectively in the face of uncomfortable situations.
The first insurance company in Nepal was established in 2004 bs and some Indian insurance companies were in operation around that time. Under the Nepal Goods Challan and Insurance Company Nepal Companies Act, Rs. It has been established with an authorized capital of Rs 5 00,000. The company was renamed as Nepal Insurance Transport Company Limited in 2016 BS and Nepal Insurance Company Limited in 2048 BS. The National Insurance Company Pvt Ltd was established on December 1, 2024, in accordance with the Companies Act, 2021, in the conclusion of the study report of the temporary committee formed on September 1, 2024, as envisaged by the third five-year plan in the context of the continuous quantity of capital flights with the insurance business of the Nepali insurance market despite providing non-life insurance services at the time of establishment. Although the Regulatory Structure Insurance Committee was established as a unit of the Ministry of Finance in 2025 BS, the work started by holding the first meeting on May 1, 2026.
As a result of the dynamics of the economic environment flowing from the liberal sector to the insurance sector through the financial sector of liberalization and globalization, the private sector National Life and General Insurance Corporation (Nepal) was established in 2044 BS, Life Insurance Corporation (Nepal) in September 2058 and the non-life, life and reinsurance company was established in various open-door licensing policies. found.
Small economy, greater equality in insurance products, unhealthy competition, increasing financial distortions in the insurance sector, weak capital structure of the insurance company, strengthening the then insurance market system, the total number of insurers is 37 and the health insurance program is in operation.
In the insurance system, all the policy arrangements related to insurance, regulatory bodies, insurers, insurance surveyors, insurance brokers, insurance brokers, insurance are integrated forms. At present, insurance act 2079, insurance regulation 2081, money laundering act 2064, health insurance act 2075, company act 2063, nepal insurance authority under insurance regulatory body, financial information unit, health insurance program by health insurance board 77 district offices, life insurance company under insurance company 14, non-life insurance company 14, micro insurance 7 and total branch network of insurer 3,007. A total of 12,234 employees, 48 per cent of the total population has rs 195.04 billion in insurance premiums.
Short review of historically successful merger work
Suryajyoti Life Insurance Company has made history of successful merger of the insurance world in the beginning of the empowerment of the insurance sector.
The risk assessment taken by the insurance company as a risk manager, calculation of the company’s swap ratio, the integration of multi-dimensional aspects such as employee management, branch, department, technology, system, management has been made possible due to the ethical leadership of the then CEO pawan Khadka and Prakash Bikram Khatri and the efficient guidance of the board of directors. In addition, the company’s reputation and merger became competent, strong, transparent in the history of the company as a result of the intelligent creative working style of the employees union office-bearers of the then Surya Life Insurance under the leadership of Raghunath Bhandari. In addition, after analyzing the precedent of the first merger, the merger of other companies had to approach the Insurance Authority to resolve the dispute.
Current insurance status
The history of Nepal Insurance Authority has been successful in determining the form of the current insurance authority through the Travel Insurance Committee, which started from a unit of the Ministry of Finance in 2025. The Insurance Authority, which is the direct regulatory body of the insurance sector, has been playing the role of a regulatory guide in the sectoral contribution to the economic development of the economy by maintaining overall sectoral stability through multi-pronged works such as strong, efficient development, expansion, reliability, access enhancement, protection of the interests of stakeholders. At present, the Authority, which has the status of giving the license of the insurer to the cancellation of the license, is an autonomous self-governing organized organization that monitors and supervises the insurance sector by being in the lead role in the examination of the insurance agent and the issuance of license, renewal work as well as the work of bomb to totumb of the insurance sector. Apart from Bagmati, there are provincial offices and central offices in Kathmandu.
Despite efforts and practices for overall empowerment of the insurance sector, in the current times of Nepal, policy implications lag efet, lack of inclusive ethical leadership of insurers, lack of actuaries in the country, high head hunting, my way is high way concept of directors and high management, lack of HR accounting, lack of opaqueness and uniformity in recruitment and selection of employees, weak state of risk-based audit, challenge of lapse policy review. Unhealthy competition in products of the same nature, weak financial literacy, the blame on the entire insurance world due to the ineffectiveness of health insurance and corona insurance, the delay in insurance claims, the emphasis on numerical business to meet short-term goals rather than competition in skilled, ethical employees and sustainable businesses, the use of dummy codes in some insurers from lower to high level employees, the ineffectiveness of the grievance redressal system keeps the problem inextricably due to the fear of social loyafing. Poor effectiveness of management information system (MIS), lack of integrated data system in the insurance sector, the practice of insuring one person for money laundering in multiple companies and the emphasis on reaching targets with the turnover of employees and agents by surrendering the insurance in one insurer are also well known in insurers.
In order to meet the challenges that come with the current dynamic world environment, the insurance sector has been gradually reformed and strengthened through the insurance act, insurance regulations and structural transformation of the regulatory body Insurance Authority, the capital enhancement of the insurer, the examination system in agent license. However, due to globalization and technological dynamics, the weak structural and working conditions of real-time supervision and monitoring of the risk directly received through internal as well as external risk reinsurance, the political shadow led by the AUTHORITY, trade unions with political colors, monitoring of insurers only for the process, some employees of the AUTHORITY are challenging to transform the excellence performance of policy provision while being the site of relative recruitment centers in insurance companies as well. found.
Conclusion
Although the insurance sector, which has created the basis of economic development through investment environment, quality of life, economic stability and economic development by managing economic risks according to the pre-determined conditions and contracts at a fixed fee of the entire economy, including individual, family, social, is now policy, structural and functional empowerment and transformation, these overall efforts cannot be considered adequate and complete compared to the world insurance world. In the recent past, online insurance installment payment, insurance fee calculation, collection of product information complaints in web base and app base, portals such as information officer, etc. have further promoted the digitization of the insurance sector through the online policy loan of Suryajyoti Life Insurance Company. can.
In the face of this difficult situation, to convert the challenge into an opportunity, increasing the capacity of the government, regulatory bodies, insurers, insurance brokers, agents, insurers and all the government agencies, including the insured, to play a coordinated role in a coordinated manner, risk-based audit, HR audit, system audit, sectoral, customer product diversification and emphasis on term plan, risk assessment capacity, competition in real time claim settlement rather than collecting insurance fees transparently. Provision of unrecognized online portals of complainants to regulatory bodies, enhancing the effectiveness of management information systems, AI-based supervision, inclusive ethical dynamic leadership and authority program with the insured, enhancing self-discipline along with human capacity building, following the basic guidance principles of insurance and international good practices, managing the insurance sector’s market risks, operating risks, customer identification risk, risk assessment risk, technological risk. The need of the hour is to build the capacity to achieve competitive, strategic advantage and maintain stability through sustainable development of the insurance sector.
(Karki is an insurance worker)
