Insurers directed to focus beyond first premiums to improve coverage, quality

Kathmandu, July 14

The Nepal Insurance Authority (NIA) has directed life insurance and micro-life insurance companies to mandatorily include renewal premiums and term life insurance premiums in their business targets for the upcoming fiscal year 2025/26.

In a circular issued to all life and micro-life insurers, the authority instructed that all employees, departments, regional, branch, and sub-branch offices must set business goals (monthly, quarterly, half-yearly, and annually) that include not only the first premium collection but also renewal and term life insurance premiums.

The authority has issued this directive following complaints that insurers were giving priority only to life insurance policies that involve large premium payments, either regular or single, when assigning business targets to their employees and departments, it said in a statement on Monday.

Sushil Dev Subedi, Executive Director of the NIA, said in the statement that due to the insurers’ focus on collecting high-value premiums, they have failed to expand insurance coverage to low-income groups, leading to issues such as policy lapses and surrenders before maturity, and posing challenges to the delivery of quality and reliable insurance services.

In this context, the authority has made it compulsory for insurance companies to consider all types of premium contributions, not just the initial ones, in their business planning, with the aim of expanding insurance access and improving service delivery across different income segments, read the statement. 

Published in The Rising Nepal daily on 15 July 2025.