KATHMANDU, July 2: The Nepal Insurance Authority (NIA) has cautioned insurance companies not to impose excessive burden on the claimants by dillydallying during the claim settlement process. The regulatory body issued the warning after receiving complaints that many entities were found being involved in such misconduct.
Issuing a public notice on Tuesday, the NIA said it has been receiving a notable number of complaints against the insurers of late. The grievances include delay in fixation of liabilities, imposing excessive liabilities on behalf of the insured and delay in deployment of surveyors while the appointed surveyors are also accused of dillydallying in submitting evaluation reports. Similarly, insurers are found asking the insured to submit unnecessary documents during the settlement process of insurance claims, adding to their inconveniences, said the sector’s regulator.
The authority has emphasized that such actions violate the terms and spirit of the Insurance Act 2022. “If any insurer is found guilty in such cases, they will be slapped a cash fine ranging between Rs 200,000 and Rs 2 million. Similarly, a surveyor found guilty in the case will be fined between Rs 2,000 and Rs 2,500 per case,” reads the notice issued by NIA.
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In recent cases, non-life insurers have barely settled half of the insurance claims against the damages caused by floods and landslides in September last year. According to the government records, the incessant rains claimed 250 lives and damaged property worth over Rs 46.68 billion.
The NIA records show that the insurance companies are left to pay Rs 6.70 billion to the insured against the insurance claims of Rs 12.27 billion. Insurance companies however have been attributing the delays to late submission of related documents by the insured individuals and slow processing by the reinsurance companies.
An official at the NIA said the authority has been pressurizing the executives of the insurance companies to settle the claims on time. “We have been asking them to appoint surveyors on fast track basis while pressuring them to settle the claims within 35 days of the report submitted by the surveyors,” the source said.
Likewise, apple producing farmers from Jumla district are also reported to face similar delays in insurance claim settlement for the damage sustained by their produce due to hailstorm last year. Citing the delays in payment against purchase of farm insurance, farmers from eight municipalities of Jumla district have launched protests for the past one week.
In many cases, people are found reluctant to purchase insurance policies mainly due to tedious documentations and delay in claims settlements. Even the state-facilitated insurance programs have been losing charm among the general public mainly due to the government’s dilly-dallying in releasing money announced in grants for such programs.
The NIA since last month has been operating a judicial bench to address the grievances of insured through fast track. However, it has hardly helped to solve the problems in the segment.
