Kathmandu. The term insurance for workers going for foreign employment is going to be re-issued through the bridge system. According to the agreement reached between the representatives of the life insurance company on Sunday, foreign employment term insurance is going to be re-issued through the bridge system.
After receiving complaints of financial deviation due to the open sale of insurance policies by the life insurance companies, the AUTHORITY had mediated and suggested the life insurer to agree to issue the policy through the bridge system again. Some insurers had also requested the AUTHORITY to re-implement the bridge system, saying foreign employment companies and middlemen had taken undue advantage due to unhealthy competition between insurers.
According to relevant sources, the current fiscal year 2081. It has been agreed to go to the bridge system to distribute the insurance revenue from July 1, 2018.
The NRA had directed the life insurers to issue insurance policies through the bridge from January 1, 2018, in order to control the distortion of issuing fake insurance policies and taking undue advantage of middlemen. This provision is due to pressure from insurers. It was cancelled again on July 15.
What is insurance pull:
Under the insurance bridge system, there is a provision to collectively bear the burden of income from the sale of the insurance policy and the cost of the claim in a certain proportion. In such a bridge system, the insurers who participate in the bridge system do not sell the insurance policy alone, but sell it in an integrated manner. In this way, the insured periodically allocates the amount of insurance revenue received from the sale of the insurance policy in an integrated manner. Apart from this, the insurer also periodically distributes the expenses for the payment of claims to be made for the insurance policy.
In the bridge, both income and risk are distributed proportionately or in a prescribed proportion.
This was the agreement of January 1, 2015:
The then insurance committee had implemented the bridge system in foreign employment term life insurance for the first time from January 1, 2018. When the bridge was implemented for the first time, the market share obtained by the life insurer in foreign employment insurance was considered as the basis for the distribution of income and risk for business and risk sharing.
At that time, National Life Insurance 19, Nepal Life Insurance 11, Surya Life 12, Gurans Life 2, Prime Life 15, IME Life 5, Union Life 11, Reliance Life 1, Reliable Nepal Life and Citizen Life were given 8 percent share each.
Apart from this, Sanima Life, Sun Nepal Life, Rastriya Bima Sansthan, Met Life Alico, Asian Life, Jyoti Life, Prabhu Life and Mahalaxmi Life Insurance have been fixed at the rate of one percent each. From the fourth year of such an agreement, the insurers had agreed to distribute both benefits and risks proportionately to all insurers.
The life insurer had made arrangements to sell the insurance policy by deploying employees in the insurance pool on a rotational basis. As per the previous agreement, Sun Nepal did not hand over the responsibility of the bridge to other insurers for a long time after Sun Nepal Life got the responsibility of operating the bridge through a cyclical system. And finally, the AUTHORITY abolished the bridge system with effect from July 1, 2019.
