The Insurance Board (IB) on Thursday endorsed Micro-Insurance Directive 2014 aiming to meet the insurance needs of low income people and backward communities.
The directives cover similar policies on both life and non-life insurance.
IB Chairman Fatta Bahadur KC said the new directive aims to carter to the insurance needs of low income people by bearing the risks of low insurance amount. It covers the need of small time traders to health insurance of low income groups.
There are seven different types of the policies with maximum insurance amount of Rs 200,000. There are a total of seven micro-insurance policies covering household, accident, livestock and birds, crops, term life, and endowment.
“The directive was much needed as insurance companies have neglected the low economic people,” added KC. All the policies will be provided by the eight life insurance and 16 non-life insurance companies.
“A small time trader also can insure his business against fire and other possible damages to his property now,” said Shreeman Karki, director of the Insurance Board (IB). He said, “The government can provide subsidies on micro-insurance policy premiums through poverty reduction programs.”
Currently, the government pays 75 percent of the insurance premium on crops and livestock. KC also underlined that this scheme can be helpful in reducing poverty.
However, KC says there are also challenges reaching out to the people living in the far-flung areas as most of insurance companies are concentrated in cities and urban centers.
Insurance expert Nil Saru welcomed the directive. “It will also streamline the informal insurance businesses in the remote communities. However, the need is to facilitate and guide the insurance companies to extend their services to those areas,” added Saru.
According to estimates around 6 percent of the population has access to life insurance. Statistics says combined premium collection by all life and non life insurance companies was to the tune of Rs 13 billion in the fiscal year of 2011/12.
source: RUDRA PANGENI, republica,13 sept 2014
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