Insurers are in trouble with the regulators action

Kathmandu: The recent circular regarding the policy sales of insurance sector regulator Beema Samiti has created chaos among insurers.

Beema Samiti had issued a circular instructing insurers not to issue any policy against a cheque unless the payment is realized. Earlier, there was practise that the insurance policies were issued against the cheque before its realization from the concerned bank. Incase, the payment is not realized, the policy will be void.

As per the rules of Beema Samiti, the payment above Rs.1 lakh must be collected through digital transfer or cheque to discourage money laundering. Recently, a mandatory provision has been added mentioning that the cheque should be realized on the same day.

Towards the end of the financial year, the agents are found to be sale policy in huge volume to meet their annual business target and qualify for the additional benefits.But due to rush of the financial year closing, the cheque may not be realized within the same day.

As per the new rule imposed by the regulator, it will be practically difficulty for the insurers to collect the payment on the same day against the payment made through cheque. A CEO questions “Should I take the policy by check in mid-July or not?” The Nepali FY ends on mid July 2021.

CEOs demand that the regulator should facilitate such an impractical situation. Even if the cheque is not cleared on the same day, they demand that the policy should be issued so that it can be cleared on the next day or the day of the receipt.

The amount of business that insurance companies gain between the period of mid-June to mid-July determines the growth rate of the companies.

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