Kathmandu: Nepal Insurers’ Association (NIA), the umbrella organization of general insurers, has submitted six-point suggestions to Finance Minister Bishnu Prasad Paudel. A representative team of NIA led by President Chunky Chhetri submitted the letter to Minister Paudel at his office today.
NIA has demanded to release of Rs.10 billion in funds to settle long-pending Covid19 insurance. It has admitted that the Covid19 Insurance Plan was launched with a multi-party agreement among the Government of Nepal, the Nepal Insurance Authority, Nepal Reinsurance Company, and General Insurance Companies. And all parties had agreed to bear the financial burden as per their commitment. All parties except the Government of Nepal have already paid against their financial liabilities for the Covid-19 insurance claim settlement. Unnecessary delay in the claim settlement has created chaos among the insured and their dependents further the faith in the state and the insurance industry has also deteriorated.
NIA has drawn the attention of the ministry to the overall development of the insurance industry. It has been mentioned that the current contribution of the insurance industry to the gross domestic production(GDP) can be expanded to 4 percent from 2.5 percent with support from the state.
NIA has requested minister Poudel to slash the income tax for general insurance companies to 25 percent from the existing 30 percent. Currently, life insurance companies pay only 25 percent income tax against their profit.
NIA has claimed that the state collects Rs. 5.5 billion annually from general insurers which can be further enlarged if the access to insurance is expanded with the implementation of effective policies and programs by the state. It has suggested enlightening the high officials of the ministry about the importance and technical aspects of insurance to facilitate them in insurance-related policy making. Further NIA has stressed the involvement of insurance experts while developing any program or policies for the insurance industry.
Further, Association has also requested minister Poudel to amend the 5 years term for the full audit of the insurance companies to 2 years to avoid practical problems. NIA mentioned that a full audit in 5 years creates practical problems to recover the tax arrears from the reinsurance companies and other parties.