KATHMANDU, May 19: The state-facilitated insurance programs have been losing charm among the general public mainly due to the government’s dilly-dallying in releasing money announced in grants for such programs.
Out of the much hyped government-facilitated insurance programs including COVID-19 insurance, farm insurance and health insurance, the insured are found to have struggled in almost all of these programs. As per the non-life insurers, the government is yet to reimburse Rs 11 billion for the insurance claims by those affected by the coronavirus pandemic.
The government had initiated the coronavirus insurance in April 2020 after the start of the COVID-19 pandemic in Nepal. It expired in mid-July 2021. In a period of one year, non-life insurance companies had sold 1,758,343 COVID-19 policies, out of which 958,198 insurance policies were sold with grants from the government. In the process, the insurance companies collected Rs 1.5 billion in premium from the sale of these insurance policies.
Following the apathy of the government, the Nepal Insurers’ Association (NIA) in September 2024 filed a petition at the Supreme Court demanding the government to settle the claim amounts. The association has demanded court intervention to make the government liable to pay the insured amounts.
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Likewise, the farmers who purchase farm insurance policies also suffer due to the government’s delay in payments of premium amounts. Last year, the Ministry of Finance was compelled to release premium subsidies worth Rs 3 billion of the farm insurance only after the non-life insurers stopped selling farm insurance policies.
With much hype, the government introduced crops and livestock insurance in January 2013. For its effectiveness, the government announced a 50 percent subsidy on insurance premiums, which was later increased to 80 percent. In October 2024, the government revised the rule to provide a 50-80 percent subsidy based on conditions.
In its 62nd annual report, the Office of Attorney General has stated that the government was yet to clear dues worth Rs 370 million allocated for premium subsidies in fiscal year 2023/24. According to non-life insurers, they are yet to receive over Rs 1.50 billion from the government in the current fiscal year.
“Due to the delay, neither non-life insurers are motivated to run the programs nor the farmers are encouraged to purchase the farm policies,” said an official of Nepal Insurance Authority (NIA) under condition of anonymity.
Meanwhile, the government has been facing challenges to manage funds necessary to pay for the insured under the much-hyped national health insurance program. Launched in 2016, the program has expanded access to healthcare services across the country, incorporating more than 8.2 million people. Under the scheme, a family of up to five members pays Rs 3,500 annually and is eligible for treatment worth up to Rs 100,000 at participating hospitals.
According to the Health Insurance Board, it has received over 9.74 million claims as of now. However, the board has not settled Rs 18 billion in dues—Rs 2 billion of which dates back to the previous fiscal year.
Expert of the insurance sector Rabindra Ghimire said general people are losing faith in the government-run insurance programs due to apathy from the government.
