Bima Samiti is the insurance regulatory authority of Nepal. Bima Samiti, is going to extend insuranceservices in rural are as through micro insurance. It includes micro insuranceas a key sector along with life insurance and non-life insurance, as informed by Insurance Board spokesperson Shakher Kumar Aryal. But still the draft act is under discussion by stakeholders. He is hopeful towards the board members that they will develop micro-insurance regulation after the promulgation of the Act that has been passed by the board members.
This scheme is not a new concept for the Nepali insurancesector but still till the date it has not been developed institution wide. Micro financial institutions, village based cooperatives and non-governmental organizations have been practicing micro insurancesince past few years. They are providing the facility of livestock, crop and health insuranceto rural people at the grass root level.
Insuranceexperts hesitate to accept such practices as micro insurance. But in the view point of director of Insurance Board, such services can be tied up with insurance if these institutions take a new improving step further. People living in that area can open an insurance company targeting micro insurance because the existing insurancedoes not affect or influence insurance companiesfrom innovating and selling micro-insurance policies as insurance product. However, there are no provisions for separate micro-insurance institution.
There is another way out to promote micro-insurancewhere institutions can be agents of insurancecompany and sell policies. Out of twenty five insurance companies- eight of those companies are life insurance, sixteen are non-life insurance and the state owned by Rastriya Bima Sansthan, they all are working in both sectors- providing insurance services in Nepal. These insurance companies are more centralized in cities and towns and more than 70 percent of the rural population has no access or reach to insurance facility. So far, around 1.3 million of the Nepalese population is in the net of insurance.
This scheme is not a new concept for the Nepali insurancesector but still till the date it has not been developed institution wide. Micro financial institutions, village based cooperatives and non-governmental organizations have been practicing micro insurancesince past few years. They are providing the facility of livestock, crop and health insuranceto rural people at the grass root level. Insuranceexperts hesitate to accept such practices as micro insurance. But in the view point of director of Insurance Board, such services can be tied up with insurance if these institutions take a new improving step further. People living in that area can open an insurance company targeting micro insurance because the existing insurancedoes not affect or influence insurance companiesfrom innovating and selling micro-insurance policies as insurance product. However, there are no provisions for separate micro-insurance institution.
There is another way out to promote micro-insurancewhere institutions can be agents of insurancecompany and sell policies. Out of twenty five insurance companies- eight of those companies are life insurance, sixteen are non-life insurance and the state owned by Rastriya Bima Sansthan, they all are working in both sectors- providing insurance services in Nepal. These insurance companies are more centralized in cities and towns and more than 70 percent of the rural population has no access or reach to insurance facility. So far, around 1.3 million of the Nepalese population is in the net of insurance.
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