Authority’s instructions to insurance companies to stop lending insurance

Kathmandu : Nepal Insurance Authority has instructed to insurance companies to stop lending insurance to insurer. As the tendency of, specially non-life insurance companies to issue insurance policies on credit but, insurer ask for payment of claims instead of his own installment, because of which the authority through a circular has instructed all companies to stop issuing insurance policies on credit.

The authority has instructed the insurance companies to immediately stop the credit imposed by the insurance companies as they are doing business accordingly. Director Dinesh Lal Karna informed Beemapost that the authority has issued such instructions saying that the quality has been observed during on-site and off-site inspections of insurers from time to time and complaints have been received regarding insurers during insurance-related interactions and discussions.

It is mentioned in the letter that a complaint has been filed with the Insurance Authority regarding the provision of credit insurance by the insurance companies and the executive heads of the insurance companies have been warned to stop providing insurance on credit based on public complaints.

Director Karna said that since the insurance companies have acted contrary to the instructions of the authority, the authority has instructed the companies to stop such work immediately. Authority has instructed to completely discourage lending insurance on credit and only to issue the insurance certificate after depositing the insurance fee.