Dstroying the Identity of the Agent’s, while making the making the Insurance Regulations, we cannot tolerate this’: President Adhikary

Kathmandu : Professional Insurance Agents Association Nepal is an umbrella organization of insurance agents across the country. The insurance agents of most of the insurance companies operating in Nepal are affiliated to this organization.The Professional Insurance Agents Association is the only organization of insurance agents working for the rights and interests of insurance agents. After the Insurance Act 2079 was promulgated last year, insurance agents all over the country are now realizing that the identity of insurance agents has been abolished.

Currently, the Insurance Agents Association is campaigning on important agendas giving a very difficult exam to become an insurance agent, reducing the benefits that insurance agents are getting. In this context the summary of the conversation that Bimapost’s Sub-Editor Rina Khatri had with Kedarnath Adhikari, President of Professional Insurance Agents Association of Nepal:

Now it seems that the Professional Insurance Agents Association is going to go on strike. what is the specific reasons ?

After the Insurance Act 2079 came into being, regulations should have been made at a certain time, which is now in the process of being made.

As far as there was a regulation to be presented by the authority, concerned persons should discuss with the professional insurance agents association, insurance association or surveyors and other bodies in the discussion and discuss whether these provisions and subjects are included in the regulation or are going to be included in the regulation.

As far as we know what was in the regulations we only found out that the regulations were gone. After some objections we went to the insurance authority and said that these matters should be amended otherwise these matters would make it difficult for us to work in the profession including the insurance agents.

After that, he said that we will amend some regulations and send them. It has been 5-6 months since the insurance regulation went to the Ministry of Finance and we have heard from the ministry that the regulation is in its final stages. While we were in the final stage, we also took various initiatives in the Ministry of Finance, but we could not get the drafts from the Ministry of Finance.

The current situation of the demand is the things given by the previous insurance regulations in the insurance regulations. Do not make any cuts in the provisions of the existing insurance regulations and add new additional facilities if possible. Because this is a three-decade-old regulation for the provision of service facilities for agents. It is our demand that the provisions should be increased according to time and not decreased.

Now it has been said that the agent has been presented as a broker in the matter of insurance regulations. What do you say about this identity?

Agents are defined as an agent. We have also given a draft so that the definition can be added. We have said that we should take this role as an agent or mediator. In the Act, the agent is said to be the mediator. However, we strongly object to the fact that the Ministry of Finance considers agents as insurance brokers in the tax paid by agents and the tax system of the state. The word broker itself is not wrong because there are brokers in the stock market as well it is a different identity in itself but it is not correct to call it a broker in insurance. An agent who works as a bridge should be called an intermediary.It was also heard that the state harassed the acting profession a few years ago. What do you call this ?

The state has not been able to identify the perpetrators. Agents have a great contribution in capital formation. There will be no development until there is capital formation. If we look at other big countries, insurance plays a big role in the development of that area. Only when insurance is developed, other developments will happen.

Because building capital is the first base and the first base to build it is insurance. And the government should also take a special look at the category of businessmen who are earning commission by doing business by paying a certain tax prescribed by law while staying in a circle defined by law. But it seems that the government sometimes does not recognize this class and looks at it with a little contempt. If this is lack of understanding of the government if we look at the world it is an integral part of growth of agent capital. The relevant authorities should understand this.

Insurance is a backbone of insurance industry. Just as a person cannot stand upright without a backbone, the insurance industry cannot stand without an agent. But unfortunately this category is never properly presented with the concept of consultation and service facilities for this category. Tomorrow, if this group gives up their hands and joins the insurance movement, what will be the condition of the insurance industry? What will be the investor’s investment?What will be the future path of the union if the insurance regulation comes to embarrass the agent?

If the concept of insurance comes to confuse the agent, then there is sure to be t insurance industry. If there is an insurance regulation that cuts the services we are getting or harasses us in other ways we will start a protest.

In the latest situation, there have been indications that the regulation has gone beyond the control of Authority. This situation has come about because the Electricity Authority did not properly discuss with the stakeholders. It is a shameful activity of the authority to let the matter under its control get out of control. We are not able to reach the ministry to see what is going on so if it causes any disadvantage we blame it not on the Ministry of Finance but on the authority. Because of the authority is our responsible body.

Even though the official of each insurance association has a draft of it none of the agents of that insurance association has any knowledge about it. This is a very sad matter. From a skeptical point of view looking at the revised provisions of the insurance regulations it seems as if some external force or a big factor has influenced it.

Since the insurance act was made we have made a lot of efforts to get ourselves involved. How many times we discuss the provisions that are kept in the draft. We have found that there has been a change when we reached the relevant authorities.But now, only a few details were given to the draft ministry as if they were involved. This regulation lacks foresight. It deserves a regulatory amendment. The Ministry should discuss with the agent and revise it. If this cannot be done it will be a big accident in the insurance industry itself. We are committed to the rights of the agent. We are trying our best for this and will continue to do so. A provision was made that if the agents fail to update their old insurances in a certain percentage their license will not be renewed otherwise they will not get any commission in the profession. Such a slab was changed. Even now, if the agent dies, there is a provision that one of his step relatives will get a certain percentage of the work he did during his life in 10 years. The arrangement that has been cut now.

We also wonder how the insurance industry will function when facilities are cut like this. We have submitted 17 points of demand so that these conditions are corrected and regulations are issued. We have given the letter with the 17-point demand to all the concerned persons. We hope that these demands of ours will be included we are confident that there will be a regulation instead of service facility cuts. If the insurance regulations come against our demand or reduce the facilities of the agents, we will be forced to start the agent movement. The given facility should not be cut if it is done, The agent will not be able to accept the said regulation. In that case, we are in a non-contractual arrangement.”The act of destroying the identity of the agent has been done there was no discussion while making the insurance regulations we cannot tolerate this”: President president.

Shankar Karki If the insurance authority calls us agents ”brokers”, we should call them no different from others. Since 2049, I have provided life insurance services to about 21,000 hundred people as an agent of the National Insurance Institute and insured until last year.

From 2002 until now I have been a full member of LIC Nepal Ltd. I have been providing life insurance to about 1100/1200 insured people as an agent.

Since the word agent is indecent, I introduce myself as “Agent” and my insureds also call me Agent or Agent Shankar Karki. In the Nepal Bar, I have seen that the junior lawyer in the category of lawyer is called “agent”. If so, is she also a lawyer?

To be a broker?

The Hon’ble Supreme Court has decided that we agents are allowed to work in three insurance companies. Later, the insurance committee made a rule that the agent could work as an agent in five insurance companies which benefited the insurance committee but made the insurance companies uncomfortable.

During my tenure, when Mr. Ramesh Bhattarai was the head of the Insurance Committee there was good harmony among the insurance committee the insurance company and the agents.