Kathmandu, Nov. 7
Minister for Finance Dr. Yuba Raj Khatiwada has directed the
insurance companies to enhance the quality of their service.
"Although the number of insurance companies has gone up,
the sector is unable to meet the desired speed and dynamics," he said at a
programme organised to celebrate the sixth anniversary of the Nepal
Re-Insurance Company Ltd. on Thursday.
He directed the companies to make a 5-year plan to increase
the service quality. "You have to decide whether you want to enhance the service
quality or increase the number of companies. Victims have to go through various
hurdles while getting back their insured money," he said and directed the
companies to resolve the issue at the earliest.
The Finance Minister said that the access to insurance has
gradually improved in the last few years but the growth was primarily propelled
by the expansion of micro health insurance and agricultural insurance.
Health insurance is promoted by the government and now
covers more than half of the 77 districts in the country. Health Insurance
Board is implementing the programme.
According to the recent statistics about 20 per cent
population in Nepal is covered by insurance.
According to FM Dr. Khatiwada, microinsurance has supported
the expansion of insurance to villages while the government has also accorded
priority to the expansion of micro-insurance and quality of service delivery.
He said that Nepali citizens should not subscribe the
insurance policies of companies that are not register in the country.
"In bordering towns, Indian insurance companies are
active and people are subscribing their policies," he said.
He stated that although the government had clearly informed
the people that buying insurance from companies across the border was illegal,
the practice was still on.
Dr. Khatiwada also said that there
should be no conflict of interest between the bank and insurance. "Same
person is in the board of the directors in an insurance company and a bank. It
has created conflict of interest," he said.
He directed the companies to
denounce the practices like fake rescue of tourists saying that it was the height
of moral degradation. According to him, it is like burning one's own house and claiming
insured money.
Chairman of Nepal Re Mahesh Guragain said that the paid-up
capital of the company would be increased soon and there would be Initial
Public Offering (IPO) from the company in the near future.
"We aim to make it a Rs. 10 billion company. It had made
more than Rs. 1 billion annual profit last year," he said. "The trend
of sending reinsurance premium to other countries will be drastically decreased
in the next five years."
Guragain also said that the company had continued the renewal
of business license in India for the third consecutive year and plans to go for
company rating within a couple of months.
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