Insurance Authority Preparing to Revise Insurance Claims Settlement Guidelines

Kathmandu — The Nepal Insurance Authority is preparing to amend the Insurance Claims Settlement Guidelines, 2024, saying the current framework needs updating to better reflect evolving market conditions and emerging challenges in claims processing.

Unlike previous revisions, the Authority plans to seek input not only from insurers and reinsurers but also from policyholders and the general public before finalizing the amendments.

According to the regulator, the revision is being driven by recent concerns and recurring issues surrounding insurance claims and the need to improve settlement procedures. Insurance operates fundamentally on trust, and delays or inefficiencies in claim payments have increasingly raised concerns about public confidence in the sector. In response, the Authority intends to broaden participation in the reform process and incorporate feedback from insured individuals alongside industry stakeholders.

The existing Insurance Claims Settlement Guidelines, 2024 had already introduced several procedural requirements. Under those provisions, once a claimant or policyholder files a claim application or notifies the insurer, the insurance company must formally register the claim and inform the claimant accordingly. Insurers were also required to maintain claim records through electronic systems.

The guidelines established separate frameworks for life insurance and non-life insurance claims. Within life insurance, different procedures were introduced for maturity claims and death claims.

For maturity claims, insurers are required to issue a notice within 15 days of policy maturity, requesting submission of the original policy document and identity verification documents to process payment. After receiving the required documents, insurers must review and settle the claim within seven days of registration.

For death claims, where the insured dies before the policy term expires, the payout is made either to the beneficiary designated by the insured or, if no beneficiary has been named, to the closest eligible legal heir or an authorized representative as defined under Section 127(920) and 127(930) of the Insurance Act. Claimants must submit an application together with all required supporting details.

The guidelines also require insurers to complete payment within 15 days after the claimant signs the claim settlement receipt. If, after reviewing the case, the insurer determines that no payment is due, it must provide the claimant with a written explanation. Claimants dissatisfied with such decisions may file a complaint with the Nepal Insurance Authority.

For non-life insurance, insurers are required to begin the claims assessment process immediately after receiving written notification or an application from the insured party. Where necessary, insurers must appoint a surveyor without delay and provide written details including the claimant’s identity, address, and the nature of the claim.

Once the surveyor submits the survey report, insurers are generally required to determine liability and settle the claim within 21 days. If settlement cannot be completed within that period, or if the claim is rejected, insurers must provide a written explanation and inform claimants of their right to appeal to the Nepal Insurance Authority.

The Authority says these existing provisions may be revised following the consultation process and public feedback.