Kathmandu: Rajuraman Poudel, executive director of the Insurance Board,has said that Nepal’s life insurance sector has gained some momentum amid the global corona virus pandemic. This was stated by Poudel while giving a presentation on ‘Problems and Solutions related to Life Insurance’ in the presence of the chairpersons of all the life insurance companies on Tuesday.
He said that the internal working procedures of life insurance companies are not of standard, actuarial valuation is not done on time, insurance policy is issued without actual risk assessment, investment is not as per investment guidelines,most investment is fixed in long term deposits. Problems such as being opaque, the procurement process not being transparent and systematic, not paying the claims to the insured quickly and increasing the surrender and lapse ratio.
Executive Director Poudel has instructed to diversify the investment, bring new insurance policies, maintain good governance, and those who have invested through cross-holding should stay within the prescribed limits immediately. He has focused on the possibility of going for a force merger otherwise. He has instructed the companies to create an environment for voluntary mergers, maintain financial transparency and hold annual general meetings on time. He is of the opinion that the chairpersons of the board of directors should take the lead in solving such issues of the company.
The chairpersons of the life insurance companies participating in the program have expressed their commitment to solve the problems raised by the insurance board. He also urged to widen the scope of investment. They have also suggested the board to make timely revision of insurance policy, rules and directives. They have also demanded to remove the provision of mandatory stamping in the insurance policy. In today’s age of buying insurance policies through online technology, insurance companies are forced to issue policies physically due to postage stamps and other reasons.
The chairpersons have also demanded to make arrangements to invest in partnership with the bank. The chairpersons have suggested to the Insurance Board to make arrangements to attract non-taxable people to insurance, to take initiative to increase the scope of tax exemption, and to set up educational institutes such as insurance colleges under the umbrella of the Insurance Board to produce expert manpower required for the insurance industry.