The government had appointed Sharad Ojha to the post last year after the then chairman of the Nepal Insurance Authority Surya Prasad Silwal was relieved of his post. Sharad Ojha is one of the youngest people to become the chairman of the finance sector of Nepal since the first Governor of Nepal Rastra Bank, Himalayan Shumsher Jawara, became the governor at the age of 26. <\/p>\n
The arrival of youths in the Insurance Authority, which keeps retirees from government service as its chairman, was seen as a violation of tradition. However, less than four months after Ojha became the chairman of the Insurance Authority, the government questioned his performance and sacked him. The case is still pending in the Supreme Court. <\/p>\n
In this one year, three people have been the chairperson of the Insurance Authority. During the GenG movement, after the country suffered physical damage worth about Rs 85 billion on September 7, there was talk of a policy arrangement to insure all the assets of the state and from now on, such a huge amount could not be managed. However, the chairman of the NRA has been changed time and again since the agitation. <\/p>\n
It is clear that the government has failed to understand the importance of the insurance sector by looking at the appointments made by the government and the priority of the insurance sector. During the bus accident in Baitadi on February 5, about three percent of Nepal’s gross domestic product (GDP) was lost due to road accidents. However, there is no possibility of discussing the inclusion of road accidents in the insurance mechanism when the government does not consider it necessary to investigate such a tragic accident. <\/p>\n
Although insurance is purely a technical subject, the government has been sending secretaries and joint-secretaries of the civil service as chairpersons. This has had a serious impact on the innovation that needs to be done in the insurance sector. One of the reasons for the non-competence of the Insurance Authority, Health Insurance Board and Social Security Fund can be attributed to the appointment of a person who has been studying the Public Service Commission and preparing for the Public Service Commission. <\/p>\n
There are 37 companies under the Insurance Authority (NEA) and the insurance premium collection business of these companies has reached around Rs 12 trillion till last January. This is a unified form of the amount deposited by the general public of Rs 12 trillion. There is a general concern that banks can go bankrupt, but we do not have a serious issue of insurance companies going bankrupt. Some people are arguing that insurance companies will never go bankrupt because of the provision of reinsurance. <\/p>\n
The argument that insurance companies do not go bankrupt is not true in the context of Nepal. It took more than three years for the insurance companies to pay the claims for the damage caused by the earthquake of 2072. It is said that getting justice late is injustice. It was an injustice to the insured to have to wait for three years to get the compensation. Some companies would have been on the verge of bankruptcy if they had been forced to pay the claim within six months or a year. The authority was aware of this issue but could not take any action. <\/p>\n
Insurance companies have not been able to pay about Rs 11 billion in insurance claims. It has been six years since the insurance companies have decided not to pay the corona insurance. If there is a regulatory provision that the insured can pay this amount unconditionally, then it is certain that some insurance companies will be in serious financial crisis. It’s not just the companies under the Insurance Authority. The health insurance board’s inability to pay Rs 14 billion claims has raised questions about the legitimacy of the health insurance board and the board is now without leadership. <\/p>\n
More than half of the loans insured by the Credit and Deposit Security Fund under the Interest Subsidy Procedure 2075 for concessional loans are being converted into non-performing loans. In the context that the average non-performing loan rate in the banking sector is around 10 percent, a serious question has been raised about the recovery of loans issued without collateral. The fund is insuring all loans without collateral. Similarly, the government has to distribute more than Rs 2 billion every year in agricultural insurance grants. <\/p>\n
In the conclusion of the book Why Nations Fail by Nobel Laureates \u00c7emoglu and Robinson, the authors say, “Any country can prosper because of institutions and fail because of institutions.” The book has expressed the view that institutional supremacy plays a role in the formation of the country. But our situation is a little different. We believe in people more than institutions. We have dozens of examples of organizations that have collapsed, but the people who have led the same organization have been portrayed as heroes. The same practice continued in the insurance sector. Various institutions related to insurance were established but personal and political interests were not seen on the institution. Between these personal and political interests, the Insurance Authority is running under the leadership of the Joint Secretary of the Government of Nepal without a full-time leader. <\/p>\n
The same government has put the NRA on the verge of becoming leaderless by raising various questions to the candidates recommended by the selection committee of professor-led who has already become the head of the department at Tribhuvan University. It seems to be working without leadership, but its long-term impact will be seen in research, regulation and innovation. <\/p>\n
Who was at the helm of the Insurance Authority in the past and who will come in the future does not matter as much as the supremacy of the Insurance Authority and the gravity of the insurance does not matter. In 10 years, 12 executive directors and more than half a dozen chairmen were appointed in the Health Insurance Board. As a result, the Health Insurance Board is going through a serious financial crisis. If the same bad practice is repeated in the Insurance Authority, the state needs to be aware that the insurance system, which should serve as a security shield for the economy, will become a problem for the economy. <\/p>\n
(The author is a postgraduate student at Pokhara University) )<\/em><\/p>\n","protected":false},"excerpt":{"rendered":" The government had appointed Sharad Ojha to the post last year after the then chairman of the Nepal Insurance Authority Surya Prasad Silwal was relieved of his post. Sharad Ojha is one of the youngest people to become the chairman of the finance sector of Nepal since the first Governor of Nepal Rastra Bank, Himalayan […]<\/p>\n","protected":false},"author":5,"featured_media":288844,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[45031,45156],"tags":[],"class_list":["post-292971","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-banner-news-en","category-blog-en"],"acf":[],"_links":{"self":[{"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/posts\/292971","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/comments?post=292971"}],"version-history":[{"count":1,"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/posts\/292971\/revisions"}],"predecessor-version":[{"id":292972,"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/posts\/292971\/revisions\/292972"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/media\/288844"}],"wp:attachment":[{"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/media?parent=292971"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/categories?post=292971"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/tags?post=292971"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}