Kathmandu. Claims disputes are on the rise in Nepal’s insurance market. In this regard, insurance agents need to have a good knowledge of the Insurance Act 2079, Insurance Regulations 2081, Contract Act 2056 and regulatory guidelines issued by the Insurance Authority of Nepal.
With the increasing technical and legal complexities in the insurance sector, professional knowledge of the law is no longer optional but has become an important part of the practice of ethical advice and protection of the insured.
Insurance agents are an important bridge that establishes the relationship between the insured and the insured. Despite such an important role, many agents are still unaware of the legal provisions governing the special terms of the policy, the determination of the surrender price, the determination of the claim price, and the complaint process. Such ignorance often leads to fraudulent sales, misunderstandings, and eventual claim rejection.
According to the statistics published in ‘Insurance Reflection’, FY 2081. Of the total 525 complaints, only 131 were cleared. This settlement figure is only about 25 per cent of the total number of complaints. The number of complaints is increasing as the insured are becoming more aware and the complaint registration process has been simplified.
On the other hand, most of the cases related to life insurance claims decided by the Authority have been decided in favor of the insured. This shows that claims have been rejected by the life insurer even when the claim has to be paid. For this reason, it is imperative for agents to be aware of the prevailing insurance laws and contract laws.
Knowledge of the law increases the importance of the agent:
}
Agents are required to be fully aware of the Insurance Act, Regulations, Insurance Directives issued by the Authority, Claim Payment Directive as well as the main provisions of the Contract Act 2056. They should be able to clearly understand the terms and conditions of the policy and explain it in the interest of the insured. Developing this capacity will help reduce the risk of misinterpretation of all these legal provisions. The insured or beneficiary is able to make a decision by knowing the extent of their rights and liabilities.
Insurance agents with legal knowledge can interpret claim denial letters, check the validity of rejections, and guide them through the appropriate complaint process. This includes assisting the insurance company in filing a complaint and advising on how to file a complaint with the Insurance Authority if it is not resolved and what evidence to submit in the complaint.
Strong relationship with the customer{
When a claim is rejected, the insured often feels cheated. In such a situation, an agent who makes the voice of the insured heard by helping to file a case against the insurance company in the quasi-judicial (Insurance Authority) or judicial body (High Court Patan) can earn long-term trust.
Providing the right guidance, assisting with the necessary documentation, and regularly contacting the insured within the procedural period to update the information can help reduce stress. Such responsible support not only protects the insured rights but also strengthens the foundation of the trustworthiness of the agent.
Anyone can sell one or two insurance policies as soon as they get the license from the authority. But in times of distress, only an agent who can stand up for the insured in a difficult situation can establish a real relationship with the insured.
Professional practice that benefits all
As insurance policies become more complex, equipping agents with legal knowledge will be an important step towards reducing disputes between insured and insured, and creating a transparent market.
The Insurance Authority has also implemented Life Insurance Directive 2079 to ensure that the agents follow a clear code of conduct, provide full disclosures, and help customers understand the terms and conditions of the policy.
Need for improvement in training:
Insurance literacy among the general consumer in Nepal is very low. In such a situation, the insurance agents are in the intensive responsibility of the first trainer for the insured. Therefore, it is appropriate to include topics related to the Insurance Act, Regulation, Contract Act, Consumer Protection Act, Claims and Complaint Procedure in the refreshed training of agents.
Legally informed agents can play a decisive role in building trust and reducing the stress between the insured and the insurance company over claim payment.
