Non-life insurers to continue farm insurance after govt assures them of settling premium subsidy payments due

Published On: May 31, 2024 09:35 AM NPT By: Republica | @RepublicaNepal

Govt delays payment of premium subsidies of farm insurance worth over Rs 2 billion

KATHMANDU, May 31: Non-life insurers will be giving continuity to farm insurance after they reached an agreement with the government on Thursday.

In a meeting held among the insurers and representatives of Nepal Insurance Authority and the Ministry of Agriculture and Livestock Development (MoALD), the insurance companies consented to give continuity to issue insurance policies to farmers. Minister for Agriculture Jwala Kumari Sah led the Thursday meeting.

Sabnam Siwakoti, spokesperson for the MoALD, said the insurers agreed to take forward their halted work only after the ministry expressed its commitment to settle Rs 970 million of the premium dues as soon as possible. The government is left to clear a total of Rs 2 billion of the premium subsidy to the farmers.

Siwakoti said the MoALD also assured the insurers to clear the remaining amount of premium subsidy by the end of the current fiscal year.

Since March this year, the non-life insurance companies have stopped issuing farm insurance policies after the government failed to settle dues for premium subsidies of the last fiscal year. To exert pressure on the government to clear the due amount, they even stopped settling the claims against the insured farm products for the last one month.

With much hype, the government introduced crops and livestock insurance in January 2013. The Nepal Insurance Authority permitted the insurance companies to issue policies to cover six types of insurance under this category including various types of crops, vegetables, cereals, fruits, poultry, fishery, cattle and other farm animals.

The regulator even made it mandatory for both life and non-life insurers to sell at least five percent of their policies in micro insurance including farm insurance. For its effectiveness, the government announced a 50 percent subsidy on insurance premiums, which was later increased to 80 percent.