The Nepal Insurance Authority (NIA) has issued a stern warning to insurance companies for delaying claim settlements and imposing unnecessary burdens on claimants. The caution follows a rise in complaints from policyholders accusing insurers of misconduct in handling claims.
In a public notice issued Tuesday, the NIA stated it has received numerous grievances against insurance providers. These include delays in assessing liabilities, asking for irrelevant documents, slow deployment of surveyors, and surveyors failing to submit evaluation reports on time. Such practices, according to the regulatory body, not only inconvenience claimants but also breach the Insurance Act 2022.
The authority has said that violators will face strict penalties. Insurers found guilty of misconduct could be fined between Rs 200,000 and Rs 2 million, while surveyors responsible for delays may face fines ranging from Rs 2,000 to Rs 2,500 per case.
The issue came into sharper focus after non-life insurers reportedly failed to settle more than half of the claims related to the damages caused by last year’s floods and landslides. Although insurance claims worth Rs 12.27 billion were filed, only Rs 5.57 billion has been paid so far, with Rs 6.70 billion still pending. Insurance companies have blamed delayed document submissions by claimants and sluggish reinsurance processes for the slow payouts.
In Jumla district, apple farmers who suffered crop losses due to hailstorms have been protesting delayed insurance settlements. Farmers from eight municipalities have been staging protests, citing delayed disbursement of claims under agricultural insurance.
According to NIA officials, insurance companies have been instructed to appoint surveyors promptly and resolve claims within 35 days of receiving the surveyor’s report. Despite the launch of a judicial bench by the NIA to address complaints in a fast-track manner, significant bottlenecks remain in the claims settlement process.
Public trust in insurance schemes, including those subsidized by the government, continues to erode due to excessive documentation and delays in both private and state-facilitated insurance programs. The NIA has vowed to continue pressuring insurers to fulfill their responsibilities efficiently and in compliance with the law.
