Will the Budget Address Unpaid COVID-19 Insurance Claims?

Kathmandu — As the government prepares to unveil the federal budget for fiscal year 2082/83 by Jestha 15, concerns are mounting within the insurance sector over the unresolved issue of unpaid COVID-19 insurance claims.

Despite four years having passed since the pandemic, over 129,000 policyholders are still waiting for their insurance settlements. According to data from the Ministry of Finance, the government owes approximately Rs. 11.32 billion in outstanding claims under the COVID-19 insurance scheme. So far, only Rs. 1.5 billion has been allocated toward this liability.

The insurance industry remains in a holding pattern, awaiting clarity on whether the upcoming budget will address the allocation of funds to settle these dues. The prolonged delay has not only affected insured individuals but also placed insurance companies in a difficult position, as they are unable to process remaining claims without government reimbursement.

The COVID-19 insurance policies, introduced during the height of the pandemic under government leadership, were seen as a rapid-response measure. However, they were issued without a comprehensive assessment of long-term financial implications. This has left a significant funding gap, as insuring against pandemics is generally excluded in standard global insurance practices.