NIA Warns Insurers Over Delays and Irregularities in Claim Settlements

The Nepal Insurance Authority (NIA) has taken a firm stance against insurance companies for dragging their feet during claim settlements. After receiving an increasing number of complaints, the regulator has reminded insurers that unnecessary delays, asking for irrelevant documents, and slow response from surveyors are unacceptable and in direct violation of the Insurance Act 2022.

In a recent public notice, NIA stated that insurers found guilty of such misconduct could face penalties ranging from Rs. 200,000 to Rs. 2 million, while surveyors may be fined per case if they fail to submit timely evaluation reports. The authority also highlighted concerns that such practices are not only frustrating policyholders but are also causing people to lose trust in insurance altogether.

Recent incidents, including flood-related claims from last September and delays in settling crop insurance for apple farmers in Jumla, have brought the issue to light. Despite launching a judicial bench for faster complaint handling, the regulator admits that claim settlement remains sluggish across the industry.