Writ Filed in Supreme Court Challenging Foreign Employment Insurance Pool

Kathmandu — A writ petition has been filed at the Supreme Court seeking the cancellation of the foreign employment temporary insurance pool introduced by the Insurance Authority. The petition, filed by Advocate Girija Adhikari, challenges the legality of the directive and is scheduled for a preliminary hearing regarding an interim order on Sunday, Shrawan 18 (August 3).

The petitioner has argued that the Insurance Authority acted beyond its legal jurisdiction by issuing the insurance pool under Section 166 of the Insurance Act. According to Adhikari, the directive should have been issued by the Government of Nepal as mandated by Section 168 of the same Act. The writ claims that the Insurance Authority, as a regulatory body, is not authorized to introduce a collective insurance mechanism of this nature without government approval.

The foreign employment insurance pool was introduced as a temporary arrangement to ensure coverage for Nepali migrant workers. However, the petition asserts that this setup unlawfully distributes the foreign employment insurance premium among all life insurance companies, including micro life insurance companies that cannot underwrite such high-risk policies.

Critics of the directive argue that this mechanism allows certain companies to receive a share of the business without directly engaging in underwriting or bearing any risk, raising concerns about unfair market practices and misallocation of premium revenue.

If the Supreme Court grants the interim order and eventually revokes the insurance pool, it could significantly affect the market share currently allotted to micro life insurers under the new system