Kathmandu: Life insurance companies have shown their concern to control the mounting policy surrender. The executive committee members of the Jiwan Bimak Sangh Nepal(JEBISAN), apex body of the life insurers, have agreed to make task-force to study the possible measures to control policy surrender.
In the meeting held this week, the participants concluded that the number of policy surrender within short period has mounted unusually despite three years waiting period for surrender value. The Insurance Board has made a provision that allows policy surrender only after completion of three years from the date of policy issue and payment of three annual installment. Earlier, the paid up value was available after completion of two years.
”We have agreed to investigate the encouraging factor for early surrender, if any, for early surrender,” An executive member of JEBISAN said that,” The existing commission and incentives structure of the insurance agency too will be taken into consider.”
According to the data received from the Insurance Board, policyholders’ have withdrawn Rs.12.18 billion with the surrender of 81,860 insurance policies in last fiscal year 2078/79.
Surya Prasad Silwal, Chairman of the Board had given directions to the CEOs of life insurers to take initiative to control and discourage early policy surrender. In addition, he has also directed to take necessary initiatives to control the rate of policy lapsation.
In the meeting, the participants said that to establish contact with the insured in the future if the details of other family members, including mobile numbers, email addresses, etc. should be collected in the insurance proposal. The alternate contact details of the policyholder will be useful to communicate policy renewal reminder to the policyholders.
Pravin Raman Parajuli, CEO of Nepal Life Insurance, which has the highest number of lapsed policies, responded that it was not possible to establish contact with the insured related to old insurance policies. He said that although efforts are being made to convey information to the insured through public notices along with the announcement of interest waiver for the renewal of expired insurance policies, the expected success has not been met.
