Kathmandu: Nepal Insurance Authority has made it mandatory that insurers must have province-level offices in each of the seven provinces. The provision has been made amid the implementation of the federal system in the insurance industry.
The Authority issued a ‘Directive on the Operation of Branch Offices of Insurers 2079’ with the compilations of its various circulars for the opening and operation of branch offices and sales network of the insurance companies. The Directives have made it mandatory to delegate authority to the province-level branch offices for supervision, monitoring, employees transfer, underwriting, claim settlement, marketing, and office management. Moreover, the insurers must submit a report to the regulatory authority with the details of authorities delegated to the province-level offices.
The Authority has set conditions to issue permission to expand branch networks. To open a new branch office inside the Kathmandu valley, an insurer must open at least three new branch or sub-branch offices outside the valley. Inside the valley too, the areas outside the ring road and municipal areas should be given priority. Moreover, the insurers have been requested to prioritize the areas with low insurance penetration and low presence of insurers for the expansion of branch networks.
The minimum number of the workforce for each level of office has also been suggested by the Directives. The province-level office must have seven employees including one at the managerial level, and the branch office must have at least five employees with one officer, and at least three employees must be employed for the sub-branch office.
According to the officials of the Authority, the Directives has been introduced in order to bring coherence in the rules and regulation for the license to open, upgrade, merge, or close the branch office of insurance companies. Earlier, there was confusion among insurers regarding the process of shifting or closing the branch or sub-branch office.