State-facilitated insurance programs in Nepal—such as COVID-19, farm, and health insurance—are facing dwindling public trust, largely due to government delays in disbursing promised grants and subsidies.
COVID-19 Insurance
Launched in April 2020 and discontinued in July 2021, the COVID-19 insurance program sold over 1.75 million policies, with more than half subsidized by the government. Despite collecting Rs 1.5 billion in premiums, non-life insurers report that the government has yet to reimburse Rs 11 billion in claims. The Nepal Insurers’ Association (NIA) filed a petition at the Supreme Court in September 2024, seeking court intervention to make the government settle these dues.
Farm Insurance
Introduced in 2013 with premium subsidies initially set at 50% (later up to 80%), the farm insurance program has also been hampered by delays. The government only released Rs 3 billion in premium subsidies last year after insurers stopped selling the policies. As of fiscal year 2023/24, Rs 370 million in subsidies remain unpaid, with over Rs 1.5 billion still pending this fiscal year.
Health Insurance
The national health insurance program, launched in 2016, now covers over 8.2 million people. Families pay Rs 3,500 annually for coverage of up to Rs 100,000. However, the Health Insurance Board has unsettled claims worth Rs 18 billion, including Rs 2 billion in overdue payments from the previous fiscal year.
Public Confidence Eroding
Insurance expert Rabindra Ghimire notes that ongoing government apathy is causing the public to lose faith in these state-run insurance schemes. An official from the Nepal Insurance Authority acknowledged that delayed payments discourage both insurers and potential policyholders.
