Nepal Insurance Authority Introduces Automatic Membership Cancellation for Inactive Insurers

Kathmandu – The Nepal Insurance Authority has enforced a new directive under which insurance companies will automatically lose their Group Insurance Fund membership if they fail to issue foreign employment insurance policies for three consecutive months after receiving approval from the Department of Foreign Employment.

According to the Authority, the move aims to address prolonged inactivity by some insurers in issuing policies, which has disrupted the intended flow of services under the foreign employment insurance scheme. Once membership is revoked, insurers will be barred from selling insurance policies under the fund.

In addition, insurers are now required to deposit the premiums collected from such insurance policies into a designated bank account of the Group Insurance Fund between the 1st and 15th of each month, with the deadline for deposit being the 16th.

The decision has drawn criticism from several quarters of the insurance sector. Some officials claim the directive was introduced without sufficient consultation and allege that Chairman Sharad Ojha acted in personal interest. Concerns have also been raised about decisions being influenced by intermediaries rather than based on institutional needs.