Print Edition - 2016-06-15 | MONEY
Stringent policies to open branch in Kathmandu
- insurance board directive
The board on June 10 forwarded the guideline to the insurers in this regard
Jun 15, 2016-The Insurance Board has come up with stringent policies for insurers that are planning to open their branch offices in Kathmandu Valley. According to the board, insurers now have to extend their service in locations outside the Valley first if they wish to open new branch in the Valley.
The board on June 10 forwarded the guideline to the insurers in this regard. “Those insurers that have been operating their five branches in the Valley should open at least two of their branch offices in other locations if they wish to open their new outlet in the Valley,” states the board’s guideline.Citing low participation of insurers to carry out their businesses in the micro-insurance and agriculture sector in particular, the board has pledged to expand insurance coverage in the segments through the new regulation. Shreeman Karki, director at the board, said they came up with the policy to facilitate the insurers to expand their business also in rural areas.
According to the board, it is preparing directives to compel insurance companies to carry out their business in rural areas. “Although the board had been requesting previously to provide their service in rural areas, most of the insurers so far have been unwilling to expand their service there,” Karki said.
Insurers are asked to open at least one of their branch offices to serve micro-insurance, crops and livestock insurance. The branch offices need to be located far from municipalities and district headquarters. As an option, the insurers can also open their office in the main trading points that include Kakadbhitta, Biratnagar, Janakpur, Birgunj, Tatopani, Rasuwa, Bhairahawa, Krishna Nagar, Nepalgunj, Dhangadhi, Kailali and Banbasa.
The board has opened the door for healthy insurance companies to acquire the branches of crisis-ridden ones after taking approval from the board. However, any insurer that acquired the Valley-based branch office of crisis-ridden insurers should also open its outlet outside the Valley within one year from the date of acquisition. The board has planned to prioritise the Valley-based insurers to open their offices in the locations outside the Ring Road.
Meanwhile, the IB has permitted the insurers to open their liaison office in foreign land. Any insurer that wishes to open its liaison office abroad has to receive approval from the IB and the board of directors of the company itself. The insurer needs to operate such offices in six months from the date of receiving IB’s approval.
Karki said they came up with the provision mainly to facilitate the insurance coverage of the workers bound for foreign employment. For this, the guideline has talked about allowing insurers to open liaison office outside the country. The board has set certain standards for insurers for the purpose. “Through the liaison office, the workers can purchase insurance policy and can receive the insurance coverage from there,” he said.
Published: 15-06-2016 09:24