Kathmandu: Non-life insurers have urged Insurance Board for revision of tariff. Due to constant tariff since last 27 years, the insurers are facing challenges for reinsurance support from renowned Reinsurance Companies.
During an interaction program held by Insurance Board,the participants from all non-life insurance companies admitted the dire need of revising the insurance tariff.
They added that the tariff issued on 2050 BS is no longer practical in case of the changes in nature of risk coverage.
They have demanded a revision of the tariff, saying that there has been a problem with reinsurance companies with good reinsurance while insuring at the same rate for decades. The Board had fixed the tariff rate in 2065 BS. And later some tariffs were slashed in 2075 BS.
Addressing the interaction program, Director of the IB Dinesh Lal Karna admitted that based on the feedback received, genuine issues will be addressed by the regulatory authority.
IB has requested to provide information about the main reasons for the denial of foreign reinsurance comapnies to provide reinsurance support to Nepalese companies.
The IB has organized such a discussion with the heads of reinsurance departments of all non-life insurance companies on Tuesday as part of its annual schedule.They have demanded constructive intervention of the Board saying that non-tariff insurance has become almost free due to cut throat competition among non-life insurance companies.
The participants demanded that the non-tariff rate should be strictly regulated. At present, some insurance rates are allowed to be determined by the company itself.
There are 20 non-life insurance companies in the market.Non-tariff businesses are being reinsured at a fee that is not enough to reinsure. That is why the companies have demanded to set a standard rate for this.
On the other hand, they have demanded to increase the current tariff rate by modifying it relative to time. At present, IB has fixed tariffs on motor insurance and agricultural insurance.
Stating that it is not natural to fix same tariff for both Cement and Hut.They have demanded for a revision in the rate by further classifying it.
The participants also demanded that the faculty insurance outside the treaty should be made more systematic, saying that there was some inconvenience. The board has been requested to play an intervening role to control and prevent unhealthy competition among insurance companies.
Addressing their suggestions, Shusildev Subedi, Director of the Board, requested the companies to conduct their business within the ambit of the prevailing rules and regulations.
While there are many non-life insurance companies, there are many instances where some companies have sold policies on credit and taken out fake insurance to show their business.