December 27: Construction entrepreneurs and energy producers have said that the new directive on raising insurance premium rates is against development. Independent Power Producers' Association of Nepal (IPPAN) have warned of starting an agitation from January 2 if the issue is not immediately resolved.  

A joint delegation of FCAN and IPPAN on Sunday handed over a memorandum to Prime Minister Sher Bahadur Deuba and the Insurance Board Nepal (IBN) in this regard. They have objected to the directive issued by the board for all non-life insurance companies on September 22. 

They are of the view that since the basic concept of insurance has been limited to formalities by the directive of this nature, the directive is contrary to the principle of insurance.  

The memorandum states that the new directive discourages the private sector and hinders Nepal's economic prosperity. "The directive, which was issued by increasing the premium without any discussion with the stakeholders, is almost certain to destroy the private sector, including Nepal's energy sector and construction industry," the memorandum further states. 

The memorandum signed by FCAN President Ravi Singh and IPPAN President Krishna Prasad Acharya, states that the directive has increased the business cost. They claim that this will increase the production cost of Nepali goods and services and also reduce competitiveness. 

The directive states that even if the insured pays the premium fee, the insured will not be able to claim the compensation from the insurer. They allege that this could lead to a situation where the insured has to pay only the premium but cannot claim the insurance.