June 17: There are indications that the insurance bill will be finalized four years after it was registered in the House of Representatives. Due to controversy, the bill was stalled in the Finance Committee of the Federal Parliament for a long time.

The Finance Committee on Thursday decided to resolve the dispute and pass the insurance bill and submit it to the National Assembly for approval. Along with this, there are indications that a new insurance act will come into operation soon.

Currently, the Insurance Act of 2049 BS is in force in Nepal. Since it did not address the new dimension of the insurance sector, the process of bringing a new act was initiated. The bill to amend and consolidate the law related to insurance was registered in the House of Representatives on July 11, 2018. It is also the oldest bill under consideration in parliament.

Now the insurance bill will be discussed in the National Assembly. After the National Assembly passes the bill, it will be introduced in the House of Representatives. The bill will be finalized after it is passed by the House of Representatives. It will be implemented after it is published in the Nepal Gazette. The government is preparing to issue a new insurance act within this month.

The new insurance bill has proposed making the Insurance Board the insurance authority. The Finance Committee has accepted the provision. In addition, the new bill also has a provision to establish insurance development fund under the same authority. The Finance Committee meeting held on Thursday has approved the provisions in the bill.

Rajuraman Poudel, executive director of the Insurance Board, said that the provision has been added for the purpose of providing subsidy in insurance premium to the low-income people as well as those below the poverty line.

“After the new Act comes into force, we will make the fund systematic by making rules and procedures,” he said.

One third (33.33 percent) of the regulation fee being paid by the insurance companies to the Insurance Board (proposed authority) will be kept in the insurance development fund. At present, the insurance companies are paying 1 percent of the premium to the board as regulation fee. In the new bill, it has been reduced to zero point 75 percent. Poudel said that one third of the same regulatory fee will be kept in the development fund.

He said that the introduction of new insurance act was a great achievement. "We are still operating under an age-old Act," he said. 

“Since the old act did not address the new dimensions of insurance sector, an attempt was made to bring a new act. However, for a long time, it was stalled in the various processes of the parliament,” Pooudel shared with New Business Age.

With the new act, the insurance sector will be more organized and stronger, he further added.

The government is bringing national insurance policy for the first time with the aim of developing the insurance sector of the country according to the international standard. The government had announced to bring a national insurance policy in the upcoming budget. Stakeholders including the Prime Minister's Office, Ministry of Finance and Insurance Board have taken initiative to implement it.