Policy aims to improve insurance sector and coverage
Kathmandu: The Government of Nepal (GoN) issued the National Insurance Policy 2023 on Friday, a first of its kind in the country. The policy was approved by the Council of Ministers and aims to bolster the access to insurance and insurance penetration in Nepal.
The policy was announced by the federal government in the current fiscal year’s policy and program. The Nepal Insurance Authority, the regulatory body of the insurance industry, prepared the draft of the policy as per the Insurance Act 2079 and submitted it to the Ministry of Finance, its parent ministry.
Rajuraman Paudel, the executive director and spokesperson of the Nepal Insurance Authority, confirmed that the policy came into effect from Friday itself. He said that the policy provides a framework and guidance for the development and expansion of the insurance industry in Nepal.
Policy objectives and strategies
The main objective of the policy is to expand the scope of insurance to the common Nepalese and to provide access to insurance in an accessible manner. The policy also aims to use insurance as a tool for poverty alleviation and social security.
The policy covers various aspects of insurance such as expansion, subsidy, long-term vision, awareness, and regulation. The policy defines the long-term goals, main objectives, specific objectives, and the strategies to achieve them.
Some of the main objectives included in the policy are:
- To reach out to the underprivileged and marginalized groups and provide them with affordable and suitable insurance products
- To adopt modern technology and innovation in the insurance industry and make it more efficient and customer-friendly
- To regulate the insurance market effectively and ensure fair competition, transparency, and consumer protection
- To follow international standards and best practices in the insurance industry and enhance its credibility and reputation
- To create a technology-friendly insurance environment and facilitate digitalization and automation of insurance processes
- To raise awareness and literacy about insurance among the public and stakeholders and promote a culture of insurance
Policy implementation and monitoring
The policy outlines the institutional framework and mechanism required for its implementation and monitoring. The Ministry of Finance will oversee the policy implementation and coordinate with other ministries and agencies. The Nepal Insurance Authority will monitor the policy compliance and enforce the rules and regulations.
The policy also envisages the formation of various committees and bodies to facilitate the policy execution and evaluation. These include:
- A National Insurance Council, chaired by the Minister of Finance, to provide policy direction and guidance
- A National Insurance Coordination Committee, chaired by the Secretary of the Ministry of Finance, to coordinate and supervise the policy implementation
- A National Insurance Development Fund, managed by the Nepal Insurance Authority, to provide financial support and subsidy for insurance expansion and promotion
- A National Insurance Research and Development Center, established by the Nepal Insurance Authority, to conduct research and development activities in the insurance sector
- A National Insurance Advisory Committee, formed by the Nepal Insurance Authority, to provide expert advice and suggestions on insurance matters
The policy also states that the policy implementation and monitoring will be based on evidence and data. The policy will be reviewed and revised periodically to ensure its relevance and effectiveness.
