Kathmandu: The Insurance Board has instructed all the life insurers to disburse all outstanding claims within a week. Following the annual progress report of the life insurers, the regulatory authority has assumed that most of the old life insurers have been holding the outstanding claim to enjoy the interest income.
The Board has issued such instruction after media reports also criticized the life insurers for holding the matured claim for long to earn interest income while making the beneficiary deprived of the claim payment.
The Board has instructed the life insurers to submit written information within one week of payment of claims for survival benefit, partial maturity claim and full maturity claim. In the financial reports of the life insurance companies, billions of rupees of such claims seem pending for years.
The life insurers are supposed to communicate each policyholders or beneficiaries for their claim payments. But they stay away from such responsibilities and publish general notice calling the beneficiaries or policyholders to collect their outstanding claims.
The mandatory disclosure of the name, policy number, and amount of claim payment of each insured who is yet to receive insurance claims has not been made public yet. Among the life insurers, only MetLife (ALICO) has published the list with the policy number having outstanding partial or full maturity claim.
Life insurance companies are making huge interest income by keeping billions of rupees in the life insurance fund on the ground that the insured are not in contact to receive the claim.
There has been a discussion of setting up an policyholder’s welfare fund by seizing the money accumulated in the life insurance fund against long pending outstanding claims. If the life insurance companies keep such amount with themselves for more than two decades instead of paying the insured, the regulatory authority can imply a mandatory provision to transfer such unpaid claim to the welfare fund.
Even in the neighboring country of India, a provision has been implemented that the insurance companies must deposit the amount of the long pending claims in the Senior Citizens Welfare Fund.