MoF indecision to settle claims against COVID-19 insurance leaves many in the lurch

Published On: September 14, 2021 07:20 AM NPT By: Republica | @RepublicaNepal

KATHMANDU, Sept 14: The Insurance Board last year launched insurance against COVID-19 pandemic with much hype, but the government bodies have left insured COVID-19 patients in lurch as they fail to settle insurance claims worth more than Rs 11 billion.

According to the Nepal Insurers’ Association (NIA), the payment of COVID-19 insurance claims have been postponed since the first week of August after the government stopped releasing necessary amounts. When the program was launched, it was agreed that non-life insurance companies, Nepal Reinsurance and Insurance Committee and the government would pay for COVID-19 insurance.

However, the Ministry of Finance (MoF), the main government body to provide the amount, has been reluctant to pay the money. “I came to learn that even insurance against the pandemic has been done,” said Finance Minister Janardan Sharma in a press meet organized at the Ministry of Finance on Sunday, expressing his ‘surprise’ on the matter.

According to Sharma, the MoF so far received claim amounts totaling Rs 11.02 billion while the complete information is yet to be collected. “It is not the issue in which the government bears partial liability. It’s a huge amount,” he said.

Almost all of 20 non-life insurers operating in the country have sold policies against COVID-19. The COVID-19 Insurance Directive stipulates that the insurance company concerned is liable to pay claims of up to Rs 1 billion.

The reinsurance company has been made to assume liability between Rs 1 to 2 billion, the company’s catastrophe fund from Rs 2 billion to 2.5 billion and the insurance committee from Rs 2.5 billion to Rs 3.5 billion. The guideline states that the government should take a liability to pay for more than Rs 3.5 billion.

The records with the NIA show that a total of 137,754 COVID insurance claims amounting to Rs 13.14 billion were received as of July end. Of the total claims, Rs 4.78 billion of 60,587 insured has been paid so far.

Sharma said the MoF is yet to make a decision on the payments. “The discussion is currently underway at the ministry to settle the issue,” he added.