Insurance companies resume selling agricultural, livestock product

Kathmandu, June 20

Insurance companies have resumed the issuance of agricultural and livestock insurance after a month.

The companies had ceased selling agricultural and livestock products since May 21, citing government's failure to pay subsidies of about Rs. 3 billion insurance premium.

It has been more than one and a half years since the payment of subsidy on the premium of livestock insurance was stopped. Similarly, payment of subsidy on fishery insurance premiums has not been paid since 2020.

Nepal Insurers Association (NIA) informed in a statement on Tuesday that the companies decided to begin selling agricultural and livestock insurance from the same day, June 20.

"The Ministry of Agriculture and Livestock Development provided some partial amount to the insurers on June 15. Likewise, Minister for Agriculture and Livestock Development, Dr. Beduram Bhusal, expressed his commitment to provide the subsidy amount immediately, so we have decided to resume the service," read the statement.

The ministry has also requested the companies to continue with the agricultural and livestock insurance service. In response, the NIA decided to sell the policies till July 16 this year. "We will stop selling agricultural policies if the government fails to pay the money by that time," said the NIA.

The government had begun providing subsidies on agricultural insurance premiums since January 2013. Insurance companies have been issuing insurance policies as per the directives of the Nepal Insurance Authority, the insurance sector regulator, but getting the subsidy amount after a year of issuing the policies. Currently, government provides 80 per cent subsidies on agricultural and livestock insurance.

According to the insurers, the government's inability to pay the subsidies on insurance premium left them helpless in clearing the claims.

"Even when the insurers repeatedly tried to get the subsidy money, the subsidy was stopped on various pretexts. This was the reason behind the cease of the business," said the NIA.

But according to the Authority and Department of Agriculture, the payment of the subsidy was disturbed as the data provided by the insurance companies couldn't be verified.

However, as the Authority is developing software to record and verify the information and statistics, the process would be simplified soon.

The NIA has requested the government, Department of Agriculture, Department of Livestock Development and Nepal Insurance Authority to take the initiative to immediately provide subsidies for agricultural insurance.

Published in The Rising Nepal daily on 21 June 2023.