Insurance In Nepal
Overcoming The Hurdles

By Om Singh

ANALYZING the present national insurance scenario, lost of views are being expressed in the national media. As at date it has been established that the industry is not gaining ground or growing due to imbalance of responsibilities between the insuring public insurance industry captains and the regulatory authorities.

To elaborate further it clearly establishes that each one has very serious obligations towards the other and the National Insurance Industry.

Role

The insurers have to see that the interests of the insuring public are not only fully protected but are provided with prompt and efficient services too. Time, to see that the insured is made fully aware of the risks to which his/her interests are exposed to.

The insurance protection is provided by awarding insurance cover, which is flawless and comes to the rescue of the client in case any claim is made.

All probable risks are proposed and necessity impressed so that a comprehensive insurance cover is provided.

Risks should be thoroughly analysed to see that only requisite/ appropriate risks are suggested to make the insurance cost effective.

Loss prevention measures are suggested to ensure that the insurance cover is provided, giving benefits of applicable discount to the insured.

New products are introduced from time to time after analysing the market trends/requirements.

The general public are educated & made aware of Insurance protection requirements.

At the time of need i.e., in case of any claim, to ensure that the matters are promptly attended to, by not only calling for completing the formalities but to assist and guide the clients in completing the formalities so that the claims are processed and settled promptly to the entire satisfaction of the insured. This trend would generate confidence in the clients towards the insurance industry.

While insuring the client must see that at the time of proposing for insurance
coverage all material facts are fully disclosed.

All the required information about property is important at the time of medical examination. All the complaints about any ailment is disclosed to the doctor so that the doctor may diagnose the diseases properly. Likewise, the insurer would be able to analyse the probable risks properly, to draft the insurance cover on a comprehensive basis to meet the client’s requirements.

The insured must see that once the policy document has been issued all requirements are met with. Shortcomings, if any, should be brought to notice of the insurers.

Insured must see that in case of any material change the insured property including value should be notified to the insurer at the earliest. So, these are recorded in the insurance cover, in order to ward off any complications at the time of claim.

Valuation must be done in a more realistic manner, so that at the time of loss, the insured is fully compensated. Undervaluation may be tempting for saving little premium but could prove to be of great loss in case of any mishap.

Under life insurance the complete information as called for by insurer is more important at this being long-term contract and smooth sailing of the contract is very necessary.

In case of a claim immediate notice should be given to the insurer. All called for information should be provided to the insurer alongwith supporting documents so the claim could be processed and settled promptly.

Delay in processing means unnecessary workload for insurer and financial loss to the insured.

In the interest of all it must be recorded here that insurance industry stands for "Contract of Indemnity" implying that the insured would be indemnified to restore the same financial position as he was immediately before the mishap. There should be no motive of profit making out of the claim. This spirit would lead to confidence building relations between the insured and insurer leaving no scope for distrust.

The life insurance and personal accident covers don’t fall under this category of contract of indemnity.

In any part of the world the "Regulatory Authority" is constituted to see that the relevant matters are properly drafted and executed in the best interest of nation and the nationals alike.

"Beema Samittee" was constituted with the same spirit and objects. When it came into existence virtually no guidelines, including Insurance Act, were existing.

This institution has come a long way yet major void still exists. So far Comprehensive Insurance Act is concerned what exists to day is just rules giving guidelines how to regularise the insurance companies, agents etc.

Absence of explicit references about Act of Insurance Indemnity, compre-hensation etc., are creating a lot of confusion among the insurance companies, insuring public and the regulatory authorities itself.

For example non-existence of proper Insurance Act has created lot of confusion while dealing with motor claims. These claims are handled partly under the provision of "Motor Act" and partly under rules, which are not very clear and explicit.

There is dire need for "Insurance Act." Our information is that under one of the projects of UNDP/ World Bank this Act has already been drafted. Now "Regulatory Authorities" should honesty see that this draft is thoroughly studied and enacted at the earliest so proper guidelines are provided to insuring public.

The insurance requirements for " Third Party Legal Liability" for commercial vehicle is put at maximum Rs. 3,00,000/—for bodily injury/death and Rs.3,00,000/- for property damage. Thus, implying that maximum amount of limit of liability is restricted as referred to and while considering claim for partial loss/injury various factors have to be taken into consideration viz., sequence of accident to establish aspect of negligence, the age of the injured/deceased, social status, earning capacity etc. After taking into consideration all these aspects the final amount of compensation is arrived at and not that Rs. 3,00,000/- is to be awarded is every case. Sometimes the absence of proper references are creating chaos and confusion, hence the Act needs revision.

This establishes that the situation warrants immediate action in right direction otherwise problems have started creeping in the insurance field which could create big problem in insurance industry. The introduction of proper compensation Act alongwith establishment of "Motor Accident Tribunal Courts" would set the matters in right direction.

Loss Prevention.

Losses are increasing in the country unprecedently. So far genuine claims are concerned it is all right but unethical approach ignoring sense of "Indemnity" is causing a concern. Authorities must see and adopt measures to make sure that the unscrupulous approaches by the claiments should be discouraged and condemned.

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