Kathmandu. The former chairman of Nepal Reinsurance Company is Dr. Rabindra Ghimire. The government appointed Ghimire as the chairman of Nepal Reinsurance Company in Kartik 2078. Ghimire resigned as the chairman of Nepal Reinsurance Company in Mangs 2079 after a controversy arose over the payment of Corona insurance claims. He is known as an insurance expert. Ghimire, who is also an associate professor at Pokhara University, was also a candidate for the chairman of the then Insurance Committee. However, he failed to become the chairman. Summary of the conversation with the same insurance expert Ghimire on Insurance Talk:
You almost became the chairman of the then Insurance Committee, the regulatory body of the insurance sector, 8 years ago. It was said that a series of events took you out of it. Let’s not go into that now. You are still watching the insurance sector of Nepal very closely. You are also involved in the teaching profession. What is the insurance sector looking like now?
I have been in the teaching profession for the past 20 years. I have also been doing research and study as a student of management. In this regard, as you said, my name is associated with insurance. Friends also interact from time to time. From the time a person is born until he dies, he struggles with risk and moves forward. Any person needs to accumulate some financial resources and means to live as a human being. While accumulating such resources and means, a person himself accumulates a little more and it is not possible for a poor or simple person to do so. Therefore, in order to ensure equal access to food, shelter, clothing, education, health, etc. for all citizens, the state has expressed its commitment to fulfill some basic needs of its citizens. Then, the state puts a certain amount of resources in a pool and distributes them and insures them. If you contribute some resources and take means, it becomes social insurance. Like our agricultural insurance. If a farmer has to buy a buffalo for 10,000 rupees, the farmer pays 2,000 and the state pays the rest. That is social insurance. Health insurance also falls under social insurance. Because there are three categories in health insurance. One category gets services without paying money, the elderly or the poor. Then another category pays 50 percent and you and I pay 3,500 rupees. Is this amount enough? Of course not. The rest of the amount is provided by the state’s resources and means.
Let’s go further. Those who can afford it or are in a relatively wealthy family. They manage the risk themselves. They pay the insurance premium themselves. That is called commercial insurance. Whatever conversation or discussion is happening now is only about commercial insurance. Which is only discussed in a small area or a small scope.
After hearing all this from you, what should we think? The way the insurance sector is progressing in Nepal and the public perception about it is not right and not in the right place?
Yes. There is a very wrong perception.
Where do you understand the insurance sector properly? How can it be properly developed?
Whatever the origin, history or development of insurance has been, it has come from Europe. It seems that America adopted it only later. However, we can also see the beginning of social insurance in Germany since 1889. Our health insurance came from there. From birth to death, all the work that needs to be done cannot be done by an individual or family alone. The government has to facilitate it through insurance. Our school and college fees are very high. Families cannot pay for it. Therefore, the state needs strong participation. This is what is borne by the state in developed countries. In our country, the state does not bear the cost of health care when it exceeds one lakh rupees. However, in other countries, the state bears it all. There are so many problems in our country when we get old. I myself am in a situation where I am wondering what to do after I turn 55, but it is easy where social insurance is good.
You gave an example of a very good practice of social insurance. In Nepal, wherever we have involved the state in social insurance, it does not seem to be working properly!
The concept of social insurance has gradually advanced after the establishment of the Social Security Fund. The Health Insurance Board has been looking only at health insurance. The Social Security Fund has not yet been able to cover nearly 5 million citizens in the informal sector. It has only covered citizens working in the formal sector.
I was trying to take you to where the government got involved in the premiums. There is a big problem in agricultural insurance. There is a situation where we are crying that we have not received payment. The government got involved in corona insurance. From there too, the insured have not been able to get claim payment of about 11 billion rupees. This case is about to reach the court. Similarly, the government is also involved in health insurance. Even though it is said that health insurance can be provided by paying Rs 3,500, there is a huge problem there. It is also heard that the hospital has not received payment. Does this mean that where has this area gone wrong?
The most important thing is the country’s politics. Everyone has been seeing that Nepal’s politics is not in the right place. Because the countries that developed along with us have now reached a highly developed state. These things have come about because of problems somewhere in Nepal’s governance structure, governance system, and the ruling elites who run the government. The concept of health insurance or social security fund is not bad. If it can be implemented properly, it will benefit the common people. When it comes to health insurance, when people say that good service is not available from hospitals, it should be understood that this is not a problem of insurance, but a problem of the hospital. For example, I myself have been using health insurance regularly for the past 6-7 years. Good medicines are not available through insurance, they have to be bought outside. That is not a problem of the Health Insurance Board but a problem of the entire system.
Again, all this is very fragmented. Some issues were given to the Social Security Fund. Some were given to insurance companies. Isn’t it a very good practice to divide it into pieces like this?
The reason why this has happened is that there is no national insurance policy in Nepal. It is on the website of the authority, you might say. However, there is a tourism policy, an agricultural policy, a trade policy, which are visible on the websites of their respective ministries. However, the insurance policy is not on the website of the Ministry of Finance. It is not even visible on the website of the Ministry of Social Security. The state is unaware of this. The state does not know what insurance is. In America, a citizen is given a number as soon as he is born and receives all kinds of services through that number until he dies.
We are also getting confused about the national identity card.
The state does not know where to use it. Policy makers themselves do not know about insurance. Its development is difficult until they know what insurance is.
Insurance did not come much later than banks. It came a few years later. Banks have come a long way, but insurance is still in such a place that it is not even explained to the minister. Whose weakness is this?
Insurance is a socialist concept. Those who carry the capitalist concept understand insurance only in terms of business. Let’s assume for a moment that an earthquake occurred in Kathmandu and caused major damage to the structures. All the houses, buildings, and other structures were insured. Now, can the insurance company pay for all this? Of course not. Therefore, the state should be able to take on the issue of providing compensation or risk management. The insurance sector does not flourish by criticizing an insurance company and floating on water.
After saying that, what we are practicing in this insurance is wrong. But how can it work if the state intervenes everywhere?
Suppose an earthquake hits a city. There are huts and there are 10-story houses. All those houses are damaged. What will the state do now? Will it build 10-story houses for everyone or something similar for everyone? Yes, in such a situation, the state will build a small, i.e., similar type of house for everyone to fulfill basic needs. This is a socialist concept. This is the concept of social insurance.
Then why did the insurance companies close down?
Now that is the concept of commercial insurance. In this concept, the insurance company pays as much as the damage has occurred. Those who have it pay the premium and get compensation accordingly. Those who do not have it need the same basic facilities. Now microinsurance has been promoted. Microinsurance is not free either.
After all, it is said that microinsurance was brought in to insure the poor, right?
This is nonsense. Microinsurance is not free.
Who is the insurer?
Insurance is a tool for risk management. We worry until we die. Every time we die, we worry about whether our children will be able to study or not, how they will live. If the state tells us that even if you die, your children’s future is assured, that they will get proper education, then there can be no greater insurance than that. If we tell you that we will take responsibility for the education, health, and employment of children, that is the greatest risk management. However, right now we are giving the wrong education. The state has no responsibility, we have to go to the insurance company and get insurance.
