Insurance Authority Directs Life Insurers to Ease Claim Payments for Disaster-Affected Policyholders

Kathmandu — The Nepal Insurance Authority has directed life and micro-life insurers to implement an eight-point framework to speed up payments to policyholders and legal heirs affected by floods and other natural disasters.

The measures are meant to simplify payments to policyholders affected by severe flooding in the Lhende Khola, Bhotekoshi, Trishuli and Narayani river systems. The directive eases procedures for cases in which documents have been destroyed, policies cannot be found or policyholders have gone missing.

Eight Measures Introduced by the Authority

1. Only essential details required in claim applications
Claim applications must include the policyholder’s name, date and cause of death, policy number and the claimant’s relationship with the policyholder.

2. Priority to documents establishing relationship and identity
Applicants must submit documents establishing their relationship with the policyholder, along with government-issued identity documents. Citizenship certificates, national identity cards, driving licences, passports and land ownership certificates, among others, may be accepted.

3. Alternative evidence of death or disappearance
A certificate or recommendation from the relevant authority or official may be accepted as proof that a policyholder died or went missing in a flood or other disaster. If no such document is available, a court’s judicial declaration of death may be used to settle the claim.

4. Claims cannot be stopped for lack of the original policy
If the original policy is unavailable, the claim may proceed on the basis of the copy held in the company’s records.

5. Policy copies must be provided free of charge
On request, the insurer must give the policyholder a free copy of the policy from its records.

6. Assistance required if company records are also destroyed
If an insurer’s own documents and records are destroyed in a flood or other disaster, policyholders and insurance agents must help update the records by providing the necessary documents and information.

7. Six-month extension for premium and policy loan instalments
Policyholders unable to make regular payments because of a disaster will get up to six additional months to pay premiums and policy loan instalments, with no extra interest charged.

8. Claims may also be paid for missing policyholders
If a policyholder goes missing in a flood or other disaster, the legal heir may apply for the insurance payment. The heir must submit a self-declaration or written undertaking accepting action under prevailing laws if the policyholder is later found to be alive.

The Authority said it introduced the measures to simplify claims settlement, given the lack of documents and the financial difficulties policyholders and their families face after disasters. It had earlier issued a separate simplified procedure for claims arising from the Rasuwa floods.