Kathmandu: The Insurance Board(IB) has issued a Directives on Climate Related Risk 2078 for both life and non-life insurers. The directives issued on January 16, has been made public on January 25 by the regulatory authority through its website.
The insurance sector regulatory has stated that, as it is desirable to address the impact of climate change on the insurance sector as well as to assess the risks posed to insurers by climate change and their response to it, the directives has been issued. According it, the directives will be made effective from July 17, 2022(FY 2079/80).
The IB has made provision to take climate change into consideration while designing a product or making investment decisions. The two pages Directive has 5 points. The third point has the clause for making disclosure of the impact of climate change risk in insurance business. The insurers are advised to provide suggestions to their clients against mitigating the risk of climate change through educational material published on their website.
After three years of execution of the Directives on Climate Related Risk, the insurers are must disclose the consideration of impact of climate change on the premium calculation while developing new insurance products.
