Insured individuals are yet to get Rs 11 billion
KATHMANDU, Sept 9: Insurers have filed a writ petition against the government for its apathy to settle payment for COVID-19 insurance claims.
The Nepal Insurers’ Association (NIA), an umbrella organization of the non-life insurers, on Sunday, filed a petition at the Supreme Court (SC) demanding the government to settle the claim amounts. The association has demanded court intervention to make the government liable to pay the insured amounts.
Payment of COVID-19 insurance claims halted
Ashok Kumar Khadka, general secretary of the NIA, confirmed the writ filed at the SC. According to him, the hearing of the petition has been scheduled for Monday.
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.
During the review period, the insurance companies collected Rs 1.5 billion in premium from the sale of these insurance policies. Out of which, 958,198 insurance policies were sold with grants from the government.
The COVID Insurance Directive stipulates that the insurance companies will be liable to cover insurance up to Rs 1 billion under this scheme, reinsurance companies Rs 1 to 2 billion, the companies’ catastrophe fund Rs 2 billion to 2.5 billion, and the Nepal Insurance Authority (the then Insurance Board) Rs 2.5 billion to Rs 3.5 billion. The guidelines state that the government will have the liability to cover insurance if the liabilities exceed Rs 3.5 billion.
In the aftermath of the spread of coronavirus pandemic, only a total of Rs 4.78 billion was paid to the insured. Out of the amount, Rs 3.50 billion was maintained from the corona insurance pool.
Over a hundred thousand people have been deprived of payment for COVID-19 insurance claims. Lack of consensus among the regulatory body, the Ministry of Finance (MoF) and the insurance companies have been blamed for the delay in settling the insurance claims.
Earlier, the MoF had even delayed payments of premium subsidies worth Rs 3 billion of the farm insurance. It was only after the insurers stopped selling farm insurance policies, the ministry was compelled to release the amount.
Overall, the insured are yet to get reimbursed with Rs 11 billion for their insurance claims of coronavirus. According to the NIA, the government’s apathy in settlement of the claims has created distrust in the sector while affecting the entire insurance business.
