Kathmandu. In the foreign employment term life insurance business, reinsurance companies will now have to act as fund managers in turn.
The Nepal Insurance Authority has made this provision by making the first amendment to the Foreign Employment Term Life Insurance Group Insurance Fund (PUL) Establishment and Operation Directive, 2081. Currently, the Nepal Reinsurance Company (Nepal Re) owned by the government of Nepal and the private sector-promoted Himalayan Reinsurance (Himalayan Re) have been operating the reinsurance business.
In this directive, the responsibility of managing the group insurance fund has been given to the reinsurance companies. Earlier, in Section 5 of the directive, there was a provision that reinsurers licensed by the authority should jointly act as fund managers. Now, by amending this section, the Authority has replaced the words ‘reinsurers jointly’ with the words ‘each reinsurer in turn for 4 years’.
As per the revised directive, now each reinsurer will have to take the responsibility of managing the group insurance fund in turn for 4 years.
Similarly, the Authority has also amended Section 8 of the directive. In the revised Section 8, it has been provided that the member insurer issuing foreign employment term life insurance policies will receive an amount of 1 percent of the insurance premium as management expenses for the work from issuing the insurance policy to paying the claim. The fund manager has been provided with the provision to match the actual expenses incurred for actuarial valuation among the member insurers based on the distribution of insurance premiums.
Similarly, the amended directive has also provided for the fund manager to arrange for reinsurance of the group insurance fund.
