Kathmandu. KATHMANDU: The government of Nepal is to make it mandatory for Nepali workers going abroad for foreign employment to be provided temporary insurance through the Social Security Fund.
According to a source at the Ministry of Finance, the government is preparing to provide insurance services to Nepali workers going for foreign employment through the Social Security Fund. Initially, there was a discussion about giving it to the government-owned National Life Insurance Company, but the government is preparing to include it in the fund with the conclusion that it would be controversial if it was snatched from the private sector and focused on the government-owned company.
Clause 26 of the Foreign Employment Act, 2064 BS states that a Nepali worker going abroad with a labour permit must compulsorily purchase the foreign employment term life insurance. The government has already made it mandatory for the youths going for foreign employment to join the social security fund.
The domestic insurer had been operating a group insurance fund (insurance pool) through the government-owned reinsurer Nepal Reinsurance Company for the transfer of risk of foreign employment insurance. In order to ensure business for Himalayan Reinsurance, a private sector reinsurer, the NEA implemented the Foreign Employment Temporary Life Insurance Group Insurance Fund (Bridge) Establishment and Operation Directive, 2081 BS. The directive was aimed at involving private sector reinsurer Himalayan Reinsurance in the bridge management.
According to the directive, there was a provision that both the reinsurers should jointly manage the bridge, but later the NRA amended the directive and included a provision that both the reinsurers would run for 4 years each. With this provision, Himalayan Reinsurance is currently working as the bridge manager.
Both the Insurance Act and the Foreign Employment Regulations should be amended:
The government has implemented the mandatory provision related to foreign employment temporary insurance through Clause 26 of Foreign Employment Act-2064 and Rule 19 of Foreign Employment Regulations-2064. Clause 26 of the Act states that a manpower company or individual worker has to submit a temporary life insurance policy document for the application for labour permit. Rule 19 of the regulation states that a manpower company should purchase insurance policies from an accredited insurer as per the prevailing law.
Based on this provision, the authority has made arrangements related to risk bearing and sale of insurance policies through the Foreign Employment (Temporary) Life Insurance Directive, 2080 BS. The Authority has issued the Foreign Employment (Temporary) Life Insurance Policy Directive in exercise of the powers given by Clause 65 and 166 of the Insurance Act, 2079.
The government has to amend Rule 19 of the Foreign Employment Regulations-2064 to transfer the provision related to foreign employment insurance to the social security fund.
Clause 24 of the Insurance Act states that no company will be allowed to use the word ‘insurance’ and carry out insurance business without obtaining a license from the authority. Similarly, Section 65 of the Act has a provision related to the operation of an insurance fund and Section 153 of the Act prohibits the operation of insurance business with anyone other than the insurer. These provisions will also have to be amended.
The Ministry of Youth, Labour and Employment can have the right to amend the Foreign Employment Regulations. The government will have to take a proposal to the House of Representatives to amend the Insurance Act.
