August 15: The government is preparing to regulate the insurance sector by the proposed Insurance Authority. A meeting of the House of Representatives on Sunday passed the Insurance Bill 2079, that has provision of forming the Insurance Authority, by majority votes.

The bill will be implemented as a law once it gets passed by the National Assembly and is authenticated by the president.

The bill that was registered in the lower house in 2018 by the then Finance Minister Yuba Raj Khatiwada has been passed by the parliament after four years.

Deliberations on the bill started since August 6, 2018. The Finance Committee of parliament then began clause-wise deliberations on the bill on December 3 the same year.

However, the bill was stalled for a long time due to the dispute over the continuity of the tenure of the then chairman of the Insurance Board and other board members.

Lawmakers registered a total of 85 amendment proposals but the committee amended 124 points in the bill. Finally, finance minister Janardan Sharma on Sunday presented the bill with the report of the committee in parliament. The amendments made by the committee was included in the final draft of the bill.

The amended bill has also resolved the issue of the terms of the chairman and board members of the Insurance Board. The bill has a provision to give continuity to the chairman of the board and other board members in the proposed authority.  

Prior to this, there was a provision to appoint a new chairman and the board members.   The then chairman of the Insurance Board Chiranjivi Chapagain has protested against such provision. Due to the dispute between Chapagain and Khatiwada, the discussion on the bill was prolonged.

Meanwhile, the bill also has provision for establishing a separate Insurance Development Fund to increase the access of insurance in rural areas and among the poor people.

One third of the regulatory charge of the insurance companies will have to be deposited in the fund. The fund will then be used for increasing access to insurance among the people of rural areas with low income and to organize orientation programmes.

The initial draft of the bill registered fours ago didn’t have the provision of setting up such fund. It was decided to set  up the fun as per the suggestions of the lawmakers during the deliberation process. The committee has also reduced the regulatory fees that the insurance companies are obliged to pay. The initial draft of the bill had proposed insurance companies to pay 0.75 percent of the total insurance premium as regulatory fee every year. But the committee has lowered it to 0.50 percent.