Kathmandu. Now, non-life insurers will have to prepare insurance policies based on the index. The Insurance Authority of Nepal (IBA) has made it mandatory for the non-life insurers to prepare insurance policies to cover the risk of water and weather and natural disasters.
The Insurance Authority has issued an index-based Insurance Directorate, 2082 for this. This directive will come into effect from February 1.
According to the directive, the insurers should prepare the policy based on the geographical structure, target group, location and effectiveness of the index measurement center, details of water and weather risk and natural disaster risk, areas where the insurance policy is applied, reinsurance support and initial and final index as well as the claim payment schedule.
Insurers may prepare policies that include risks arising out of water and weather, or risk arising out of natural calamities, or both. When preparing an insurance policy, it is important to use clear language without using vague and duplicate words such as rough, conjecture, or almost double meaning.
This insurance policy has to be prepared and submitted to the Insurance Authority for approval. If it is deemed appropriate to issue the policy, the Authority can give approval by setting the necessary conditions.
While issuing the policy, the time of issuance of the policy and the date, hour and minute of commencement of risk should be mentioned. The term of the policy expires at 12:00 midnight on the day of expiry.
The directive also provides for the issuance of insurance policies collectively. It will be issued in the name of the organization.
The insurer is not allowed to issue this insurance policy without taking the full premium. However, the Government of Nepal, Provincial Government or Local Level shall not be compelled to issue an insurance policy by charging partial insurance premium.
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