IB steps forward to settle insurance claims of COVID 19, injects some hope to insured to get payment

KATHMANDU, Nov 5: The Insurance Board (IB) has started the process to settle payment for COVID-19 insurance claims that were put on hold for a long time.

The IB has initiated payment out of the ‘inadequate’ amount provided by the Ministry of Finance (MoF) for the purpose. According to the IB, the MoF has provided only Rs 1 billion out of the insurance claims of over Rs 11 billion under the heading.

Over a hundred thousand people have been deprived of payment for COVID-19 insurance claims. Lack of consensus among the IB, the MoF and the insurance companies have been blamed for the delay in settling the insurance claims.

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An official at the IB said the Board last week held discussion with the Nepal Insurers’ Association to expedite the process to settle the insurance claims. After a long hiatus, the MoF a month ago, agreed to release only Rs 1 billion to settle the insurance claims, which has prompted the regulator to make the necessary move, according to the source.

The Corona insurance, which started in April 2020 after the start of the COVID-19 pandemic in Nepal, expired in mid-July 2021. In a period of one year, non-life insurance companies had sold 1,758,343 COVID policies. A premium of Rs 1.5 billion was collected from the sale of these insurance policies. Out of which, 958,198 insurance policies were sold with government premium grants. 

According to the IB source, a consensus has been reached to add up Rs 818.10 million by the IB, the insurers concerned and Nepal Reinsurance Company, on top of the MoF provided amount. If the proposal is materialized, the IB is planning to generate 45 percent of the funds from these three entities while remaining 55 percent will be considered from MoF provided funds.

Out of the amount equivalent to 45 percent, the IB will bear 8 percent; Nepal Reinsurance Company will assume 12 percent, while the insurance companies will fund the remaining 25 percent. Raju Raman Poudel, executive director of the IB, said the matter is yet to be finalized.