Account Committee’s strict instructions on payment of claims of insurance policy surrendered; “Deduct 25 percent of office expenses and return the remaining amount”

Kathmandu : Regarding the insurance policy surrender, for the first time the public account committee has given strict instructions to the regulatory insurance authority and asked them to make arrangements to return 75 percent of the amount to the insured when surrendering their policy.

In the meeting of the Public Accounts Committee held on 28th of December, 2023 A.D, Chairman Rishikesh Pokharel said that strict instructions have been issued in favor of the insured. According to the instructions given in writing to the Insurance Authority, it has been asked to make arrangements to return 75% of the remaining amount to the insured within six months after deducting 25% of the office expenses of the surrendered insurance policies if the insured have surrendered the policy within three years.

Considering that the state has not been benefited from the surrender amount of the insurance policy and the rights and interests of the insured have not been protected, it has asked to end the system of non-return in the name of the surrender.

The Public Account Committee has given this instruction to the regulatory body Nepal Insurance Authority saying that the dire condition of the insurance policy will have a negative impact on the insurance if this rule is not followed immediately. Chairman Pokharel told Beemapost that the Account Committee has directed the Nepal Insurance Authority to return the remaining amount to the insureds by taking a low operating fee (not to exceed 25 percent) and taking into account the interests of the insureds who have surrendered within three years.

The instructions of the Accounts Committee are contrary to the prevailing insurance laws. However, after the instructions given by the Accounts Committee, which is a mini-parliament, it has to be addressed by the regulatory body.

According to the instructions of the account committee, the regulatory insurance authority will have to amend the existing provision of not surrendering before the completion of three years from now on and arrange for any insurance policy to be surrendered. And after deducting 25% of the office expenses, the remaining 75% of the policy will have to be returned to the insured. It may take some time to arrange the legal system for this regulation.