Rastriya Swatantra Party MP Lima Adhikari Questions Insurance Sector Irregularities and Regulatory Authority's Capacity

Kathmandu. Rastriya Swatantra Party MP Lima Adhikari has raised questions about the irregularities rampant in the insurance sector and the regulatory capacity of the Nepal Insurance Authority. Speaking at the meeting of the Finance Committee under the House of Representatives on Tuesday, MP Adhikari expressed suspicion that there might have been financial irregularities in the distribution of licenses and merger processes of insurance companies.

She stated that even with 37 companies operating in Nepal, a small economy – 14 life, 14 non-life, 7 micro-insurance, and 2 re-insurance – insurance penetration remains low. Presenting data that only 44 percent of the total population is covered by insurance, even when including those working abroad, and 56 percent of citizens are still outside the reach of insurance, she questioned the effectiveness of the Authority.

Her comment is that licenses were distributed indiscriminately in the past without studying market needs and capacity, and it is contradictory to bring a policy for capital increase in a short period and pressure for mergers. Speaking at the meeting, she said, 'The common citizen's question is whether such a policy of giving licenses and then immediately going for mergers benefits specific business houses and if billions in financial irregularities have occurred.'

She questioned who would take responsibility for such a suicidal and short-sighted policy. Mentioning that the general perception is that getting insurance is a hassle, she added, 'Why are insurance companies so helpless and why does the Authority appear so weak? Is the Authority not influenced by the operators and political leadership?'

She demanded transparency regarding where and how the amount from the 'Insurance Literacy Fund' operated by the Authority and insurance companies is being spent. She also questioned what concrete program for 'digital insurance' through technology exists to extend insurance access to citizens in remote areas. MP Adhikari also raised concerns in the committee about the public facing significant difficulties during insurance claim payments and not receiving timely payments during disasters.