Kathmandu. With the issuance of the Insurance Regulations, 2081, the number of applicants for the life insurance agent license examination has started to dwindle. This effect has been seen due to the new provisions regarding the minimum educational qualification and license fee for the agent profession license.
The Insurance Regulations have determined the minimum educational qualification as 12th class or proficiency certificate level from the previous SLC/SEE. Similarly, the Nepal Insurance Authority has increased the amount for the insurance agent license fee from the previous 1 thousand rupees to 2 thousand 500 rupees. In addition, an additional 500 rupees must be paid as a regulatory fee. An agent license is obtained only after paying a total of 3 thousand rupees for the agent license and examination fee.
Before the implementation of these regulations, it was enough to pay a total of 500 rupees to the authority for the agent license. The life insurance company was charging an additional Rs. 500 as training fee. The new life insurance company had also arranged for free training.
To encourage agents to enter the profession as the license fee was cheap, the branch manager and senior agency manager of the life insurance company used to personally bear the cost of the license on behalf of the examinees. Some life insurance companies had arranged to bear the Rs. 500 that had to be paid to the insurance authority as license fee as part of the insurance policy expenses. Now, after the license fee has been increased one and a half times at once, the trend of investing from the pocket has been curbed.
‘There will be no more corrupt agents’, says an insurance official, ‘However, now it will take time to find potential agents.’
Om KC, the central general secretary of the Professional Insurance Agents Association, said that the increase in agent license fees will have a qualitative rather than quantitative impact. ‘If the agent license fee increases, the number of agents will decrease,’ he said, ‘However, agents who get a license by spending 2500 will work hard to do good business. This brings qualitative results in the insurance business.’
Involvement of third parties in conducting the examination
Insurance Regulations, 2081, the Authority can also assign the responsibility of conducting the examination for insurance agent license to a third party. The Insurance Regulations include a provision that the Authority can conduct the examination itself or through any other organization. The Authority, which is conducting the agent license examination online, is currently using the human resources of its head office and all six provincial offices in the entire examination process. In cases where a third party conducts the examination for a fixed service fee, the Authority may use its manpower for other productive work.
According to the Insurance Act, 2079, there is a provision that an agent license once obtained is valid for 3 years.
