The Insurance Board (IB) plans to expand life insurance services to 15 percent of the country’s population from the existing 8 percent in the next two years.

Simplifying claim settlement procedures and educating the public, particularly in rural areas, to encourage more people to buy insurance as a host of new insurance companies have entered the scene will be major items on the agenda, the regulator said.

Currently, migrant workers leaving for foreign employment are required to buy life insurance compulsorily, but very few others step forward to buy policies on their own.

IB Chairman Chiranjibi Chapagain said they issued permits to new insurance companies with the expectation that they would expand insurance coverage across the country beyond the Kathmandu Valley.

“With an increase in the number of insurers, it is expected to promote competition that will induce them to penetrate new areas,” Chapagain said.

The board recently issued permits to 10 new insurance companies, bringing the total number to 18.

“We have planned to create a provision requiring them to conduct a certain portion of their business in locations outside the Valley,” Chapagain said.

According to Economic Survey 2016-17, Nepal’s insurance market has been expanding by 17.10 percent annually. Life insurance premiums account for two-thirds of the total premium collection of Rs55 billion.

Insurance premiums contribute 2.2 percent to the country’s GDP.

Chapagain said they had focused on making insurers provide quality service to their clients.

“We have also formed a monitoring team to ensure good governance in the insurance business,” he said.

Bank guarantee deadline extended

KATHMANDU: The Insurance Board (IB) has extended the deadline for newly licensed life insurance companies to secure their bank guarantees. New companies are required to maintain a Rs1.20 billion balance in their bank accounts by Wednesday.

The IB has issued operating licences to 10 insurers. They are IME Life Insurance Company, Jyoti Life Insurance Company, UniLife Insurance Company, Citizen Life Insurance, Star Life Insurance, Sun Nepal Life Insurance, Sanima Life Insurance, Reliance Life Insurance, Reliable Life Insurance and Mahalaxmi Insurance.

Among them, Mahalaxmi Insurance has failed to abide by the board’s regulation. The new companies were supposed to start operations within six months of receiving the licence. IB Chairman Chiranjibi Chapagain said the board, following instructions from the Finance Ministry, had extended the deadline by one and a half months. (PR)