Kathmandu. The business of Sun Nepal Life Insurance and Asian Life Insurance will shrink significantly if the decision regarding business sharing through foreign employment insurance bridge is implemented.
Nepal Insurance Authority (NEA) last fiscal year 2081. In the event of the implementation of the directive issued with effect from July 1, 2018 regarding the business sharing of 82, rs 1.30 billion will have to be allocated to other life insurers out of the amount collected by these two life insurers. The two insurers have collected a total of Rs 2.09 billion from the sale of foreign employment insurance policies.
Asian Life will receive a total of Rs 215.536 million as foreign employment insurance while distributing business as specified in the Directive on Establishment and Operation of Foreign Employment Term Life Insurance Collective Insurance Fund (BRIDGE), 2081 ISSUED by the AUTHORITY on July 1, 2081. Similarly, Sun Nepal Life is expected to collect only Rs 576.55 million as foreign insurance premium.
Foreign employment insuranceIn the last fiscal year, a total of 17 life insurers, including three small life insurers, collected Rs 3.57 billion in foreign employment insurance premium. According to the directive, Asian Life will account for 6.03 per cent and 16.13 per cent of the total amount collected. ,
A writ petition has been filed in the Supreme Court alleging that the directives of the AUTHORITY regarding the establishment of foreign employment insurance bridge fund and business sharing are illegal. Only if the Supreme Court rules in favor of the writ petitioner in this writ, the investment made by Sun Nepal and Asian Life for the collection of foreign employment insurance will be raised.
According to the directive, three small life insurers will benefit the most from the distribution of insurance fees. These life insurers will get the amount of foreign employment insurance fee from the allocation of 5 to 34 times more than the insurance fee collected.
The Department of Foreign Employment, through the Ministry of Labour, Employment and Social Security, has initiated the process of repealing the provisions related to foreign employment insurance through the Ministry of Labour, Employment and Social Security. Life insurers are also trying their best to stop it.
