List of New Arrangements & Instructions Issued By Insurance Authority To the Micro Insurance Companies

Lately, the Insurance authority has been working with micro-insurance companies as the first priority. Only a few months back, the authority granted licenses to 7 new micro insurance companies.

Earlier, Nepal Insurance Authority published a notice inviting applications from companies interested in applying for a license to operate a micro-insurance company in Nepal. Likewise, 3 micro life insurance and 4 micro non-life insurance companies had been selected to conduct micro insurance activities in Nepal.

Now the authority has published separate guidelines for micro-insurance companies. According to the authority, the necessary arrangements covering the company's operation and the rights of the insurer have been clarified through the guidelines.

• As of now, four companies have met the capital requirements and are on the verge of receiving licenses. Such companies should target the underprivileged, low-income groups, people who live in underdeveloped areas, and marginalized populations, according to the rules.

• Under micro life insurance, business insurers can carry a maximum of 4 types of insurance. These include whole life, periodic/variable life, term life, and other short-term life insurance.

• Five different types of insurance business may be conducted by an insurer operating a micro non-life insurance business. This includes microinsurance for buildings, companies, and real estate in addition to microinsurance for vehicles, engineering, liability, and financial loss.

• According to the rules, short-term life insurance policies can only have terms that are one year or longer, while short-term non-life insurance policies can only have terms that are one year or shorter.

• The insurer is not allowed to issue a policy until the whole insurance premium has been paid by the insured. However, if the government and the relevant local level have been providing subsidies in the insurance policy by lowering the equal amount and taking the remaining insurance cost, there is no barrier to insurance.

• The insurance rate and method outlined in the insurance policy should be used to calculate fees. No change may be made to the fee established in accordance with the insurance policy. For the duration of the insurance period, according to the policy, the rate cannot be increased or decreased after it has been granted.

• Companies are permitted to insure up to Rs. 50 lakh in engineering mini insurance, Rs. 5 lahks in liability and monetary loss micro-insurance, and Rs. 5 lahks in other mini-insurance for homes, businesses, and other properties.

• In addition, the authority said that this new directive does not hinder the work of the insurance companies that are currently providing microinsurance.

For reference, a PDF file regarding the new provisions granted by Insurance Authority to the Micro insurance companies have been attached.