Kathmandu. The Insurance Regulations 2081 have addressed the existence of some services and service providers that have not yet been legally used in the insurance sector of Nepal. The Regulations have paved the way for the Nepal Insurance Authority to distribute licenses ranging from claim investigators to insurance aggregators.
Another provision included in the regulations is related to third party facilitators. This provision envisages the appointment of third party facilitators to facilitate any insurance claim between the insurer and the insured.
Section 57 of the regulations contains a provision regarding third party facilitators. In this section, those interested in working as third party facilitators must obtain prior approval from the Nepal Insurance Authority before registering the company. After obtaining approval, an application for a license must be submitted by depositing Rs 10,000 as license fee in the authority’s bank account.
Section 59 of the regulations stipulates that the chief manager of an organization willing to provide services as a third-party facilitator must have at least a bachelor’s degree and that the organization must have at least one doctor registered with the Medical Council. While appointing a third-party facilitator, the insurer must enter into a written agreement with the service provider organization, specifying the services, terms and conditions, and facilities. Such an agreement should be registered with the Authority by the facilitating organization.
As per Sub-section 2 of Section 60, the third party facilitator shall prepare an annual report and submit it to the Authority within 3 months of the end of each financial year.
Although this is the first time that the provision regarding third party facilitator has been introduced in Nepal, it is being implemented in the insurance sector in many other countries including neighboring India. In India, such facilitators or third party administrators are being appointed especially for health insurance claims.
Third party claim facilitators are generally used by health insurance providers. The insurer has delegated many of its administrative tasks through such service providers. Instead of directly deploying human resources for claims processing, premium collection, insurance proposal compilation and other daily tasks, it is economically viable for insurers to appoint a third party facilitator.
In India, hospitals or healthcare providers that operate their own health insurance often delegate administrative responsibilities to a third party. In the case of Nepal, appointing a third party facilitator for the contributor support program operated by the Employees Provident Fund can be effective.
