Covid Insurance Claim: Insurance Board suggests 4 alternatives

Kathmandu: The Insurance Board has given the Government of Nepal four options for paying Covid19 Insurance claims. The finance minister Mr. Janardhan Sharma had directed the Insurance Board to present alternatives for the payment of Corona insurance claims.

On Wednesday, Finance Minister Janardan Sharma had discussions with IB’s Chairman Surya Prasad Silwal. During the discussion, the team of the IB had given four options to Finance Minister Sharma.

The IB has given the Ministry an option to pay the claim from the proceeds from the sale of the Government’s promoters shares in Nepal Reinsurance. At present, the Government of Nepal has Rs.4.40 billion investment in Nepal Re.

Currently, the share of Nepal Re is above Rs. 1,300 in the secondary market. But the value of the promoters shares in the name of the GoN is not very high. With a net worth of Rs. 154 per share, the promoters share is likely to be sold above Rs. 400. If the government wants, it can sell at a rate of more than Rs. 400/500 per unit and settle the long pending Corona insurance claim.

The Board has suggested to the ministry that as a second option, the insurance companies can facilitate the payment of claims if GoN waives the tax, VAT or adjustment. If the government exempt the insurance companies from VAT and tax for a certain period of time, insurance companies will pay the insured immediately.

The GoN has been insuring civil servants, soldiers and police through the National Insurance Company. The government has made a policy to provide health insurance to the employees.

The third option suggested by the IB is to bear all the health insurance premium of GoN civil servants and security forces and later bear the claim too. The GoN should be ready to take the risk of paying the claims for the civil servants.

Similarly, the Board has given the fourth option saying that it is possible to issue Covid bond and pay the claim from the same amount.

Apart from the above options, it has been discussed that 50 percent will be borne by the GoN and the remaining 50 percent will be borne by the insurance company, IB, Nepal Re and others. Insurance companies have yet to pay Rs. 9 billion in corona insurance claims.

The GoN is under pressure from all quarters to pay the Corona Insurance claims.

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