The Nepal Insurance Authority (NIA) is facing mounting criticism as complaints against domestic insurance companies continue to rise, while dispute resolution remains sluggish.
Data from the regulator show that 89.25 percent of registered cases are still unresolved. In the first five months of the current fiscal year (FY), the NIA delivered verdicts in just 33 disputes and facilitated reconciliation in 16 cases.
As of mid-December, the authority was handling a total of 456 complaints. Of these, 394 cases were carried forward from FY 2024/25, while 62 new complaints were registered during the first five months of the current FY.
Amid growing dissatisfaction among policyholders over delays in claim settlements, the NIA established a judicial bench around eight months ago. Existing laws empower the authority to resolve insurance disputes through mediation, and the regulator has pledged to ensure transparency and speed up the settlement process.
The judicial mechanism is designed to function in a court-like manner, with hearings conducted by concerned lawyers in the presence of both the insured and the insurer.
However, according to an NIA official, dispute resolution has slowed recently due to delays in filling vacant positions on the NIA board.
Despite regulatory delays, insurance companies settled claims worth Rs 28.83 billion between mid-July and mid-December this year. Life insurance companies accounted for Rs 18.42 billion in payouts covering 90,414 policies, while non-life insurers settled Rs 10.41 billion in claims for 56,240 claimants.
Still, a significant backlog remains. The NIA reports that insurers have yet to settle claims totaling Rs 54.89 billion. Of this amount, Rs 5.09 billion is pending under life insurance, while non-life insurance claims account for a much larger Rs 49.79 billion.
