Print Edition - 2015-06-01 | MONEY
Insurance cos told not to issue dividends
May 31, 2015-
The Insurance Board (IB) has directed non-life insurance companies that have not yet held their annual general meetings (AGM) not to distribute cash dividends to their shareholders in the post-earthquake scenario.
As insurers would have to make massive payouts due to the great scale of destruction caused by the earthquake, they have been told not to distribute cash dividends.
According to the board, non-life insurers have so far received 12,500 claims and they have settled 174 claims worth Rs27.8 million. On the other hand, life insurers have settled 107 claims worth Rs33.6 million out of the total 219 claims.
“Those that have not yet held their AGMs have been told not to distribute cash dividends as those that have done so have been facing difficulties,” said Fatta Bahadur KC, chairman of the board.
Meanwhile, the IB said that claims settlement so far had been slow. According to KC, insurers have been ordered to settle claims as soon as possible.
The IB on Sunday asked surveyors to fast-track the process as insurers have been claiming that they were failing to speed up claims settlement due to delays by surveyors in submitting their reports. “In fact, work has not moved ahead in a speedy way with insurers assigning a
low number of surveyors,” said KC. According to the IB, only 170 surveyors including foreigners have been mobilized to carry out assessment of the damage.
“The board had given surveyors’ training to 475 people, but insurers were rarely found to be using them to assess the damage,” said KC.
Earlier, the board had asked insurers to hire foreign surveyors to accelerate the process of damage assessment. Similarly, it had also directed insurers to settle the claims early based on the preliminary damage report to be adjusted after the surveyors submitted their final reports on the damage.
An official at Lumbini General Insurance also blamed the low number of surveyors for the slow claims settlement. “With low availability, a single surveyor is overloaded with work as many insurers may have hired them simultaneously,” said the source.
Published: 01-06-2015 08:12