KATHMANDU, March 14: The Nepal Insurance Authority has moved forward to set up a judicial bench targeting to maintain transparency and to expedite the settlement process of the insurance claims.
The sector’s regulator has come up with the plan at a time when there is growing dissatisfaction of insured people regarding the delay in process of the claims settlement. The records with the NIA show that complaints regarding delayed insurance claim settlements are on the rise, with policyholders facing financial stress and urging insurance companies to improve processes and communication.
As an instance, people have filed insurance claims worth Rs 12.87 billion for damages caused by floods and landslides triggered by incessant rainfall of September 26, 2024. However, claims of only around Rs 3 billion have been settled in over six months of the tragedy of the natural disasters.
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According to the NIA, it registered a total of 141 complaints in the first six months of the current fiscal year. In the past six years, complaints have increased from 100 in 2018/19 to 244 in 2023/24.
Likewise, a total of 430 complaints are under review of the NIA at present. These include 287 pending cases from the previous fiscal year. The increasing dilly dallying in claims settlement is also blamed for keeping away the people to purchase insurance policies.
Sushil Dev Subedi, spokesperson for the NIA, informed that the board meeting of the NIA on Tuesday, decided to set up a separate judicial bench to resolve the cases of insurance claims. According to him, the proposed structure is envisioned to take the related cases in similar modality of a court, in which the hearings will be carried out by concerned lawyers in presence of the insured and insurer companies.
The NIA records show that most of the complaints on claims settlement are related to non-life insurance companies. In many cases surveyors are found underrating the loss from damages, while in other cases, insured parties are found inflating the claim amounts.
The law has given authority to the NIA to resolve disputes through mediation. However, the delays in finalizing the cases by the regulator have been compelling the concerned to take the cases to the High Court and the Supreme Court.
Subedi said the NIA has sought to materialize its plan by the start of Nepali New Year 2082 (mid-April). After the full-fledged operation of the para-judicial body, the NIA will be publishing the details of the cases related to insurance claims on a regular basis, according to Subedi.
