IB team to keep tabs on insurance companies

KATHMANDU, MAY 03

The Insurance Board (IB) is forming a monitoring team to look into whether the insurance companies in the country would be settling the claims related to life insurance, accident insurance and properties ravaged during the earthquake that hit the country on April 25 and subsequent aftershocks.

The regulator said it initiated the move in order to ensure that the earthquake victims get the insurance coverage without delay.

“The board initiated the move to guarantee that the insured individual who suffered from the natural disaster receives quick relief,” said the IB spokesperson Raj Kumar Aryal.

At normal times, the insured has to go through a lengthy process in order to get the insurance coverage. As a result, it sometimes even takes several months just to receive the insured amount.

The team will keep a close watch on the insurance companies to see whether they will be resorting to the fast track method to provide the earthquake victims the insured amount promptly.

On Monday, the regulator directed insurers to settle the claims early based on the preliminary damage report to be adjusted after the surveyors submit their final reports on the damage.

Meanwhile, the IB, issuing a circular on Thursday, also eased the process of hiring foreign surveyors. The circular says insurance companies do not need the board’s permission to hire foreign surveyors for assessing the damage incurred by the insured properties.

As a rule, the insurer needs to hire foreign surveyors to work jointly with local surveyors in order to assess the losses incurred. For the purpose, the insurers need to take approval from the regulator.

The IB move is also expected to fulfil the paucity of surveyors in the sector. According to the board, there are less than 100 active surveyors in the country, although more than 250 persons have surveyor’s licence. The existing number of surveyors is considered inadequate even in a normal situation.

Following the devastation wrecked by the April 25 earthquake, property insurance claims have increased along with vehicles insurance, life insurance and accident insurance claims. However, the properties of many individuals might not be eligible for insurance coverage if they are not insured in the first place. Similarly, a number of properties in housing projects and high-rise apartments might also not get insurance coverage if the insurance policy is discontinued. According to an insurance company official, insurance policies for many such properties does not provide continuous cover as they are discontinued once the builder hands the housing project or high-rise apartment to the buyers after completion of the construction work.

Aryal however claimed that almost all the properties in housing projects and high-rise apartments would be eligible to receive insurance coverage if they’ve suffered any losses. “The board has since last year maintained that those properties which’ve purchased fire insurance policy should also buy earthquake insurance policy,” said Aryal, adding that almost all such properties have purchased fire insurance.

There are altogether 26 insurers out of which 9 are life insurance and the rest are related to non-life. The IB claimed that these insurance companies are in a position to settle the liabilities that could arise due to the mega quake. According to the board, these companies are backed by insurance fund, which they have to maintain based on the insured volume, along with the disaster fund in which the insurers have to contribute 2 percent of their net profit along with reinsurance.

Source: The Kathmandu Post