The Nepal Insurance Authority (NIA) has embarked on the establishment of a judicial panel aimed at bolstering transparency and hastening the resolution of insurance claims. With growing discontent among policyholders concerning the delays in settling claims, the regulatory agency seeks to tackle these issues and optimize the procedure.
Records from the NIA reveal a surge in complaints, as insured parties endure extended financial hardships due to sluggish claim processing. Following the floods and landslides on September 26, 2024, insurance claims totaling Rs. 12.87 billion were submitted. Yet, more than six months later, only approximately Rs. 3 billion has been resolved, highlighting the inefficiencies in claim resolutions.
The pile of complaints continues to increase, with 141 new cases recorded in the first half of the ongoing fiscal year. Over the last six years, the volume of grievances has more than doubled, reaching 244 in 2023/24 from 100 in 2018/19. Currently, 430 complaints are still unresolved, including 287 pending cases from the last fiscal year. The sluggish settlement process has deterred many from acquiring insurance policies.
As stated by NIA spokesperson Sushil Dev Subedi, the authority’s board has agreed to create a judicial bench that will operate akin to a court, where legal specialists will hold hearings in the presence of both insurers and policyholders. Most conflicts arise from non-life insurance claims, where surveyors are frequently accused of undervaluing damages, while some insured individuals are found to be inflating claim amounts.
The NIA, which possesses the legal capacity to mediate disagreements, has been criticized for delays that have compelled many cases to be escalated to the High Court and Supreme Court. To rectify this, the authority intends to operationalize the judicial bench by the Nepali New Year 2082 (mid-April 2025). Once it is fully operational, it will also provide regular updates on claim resolutions, ensuring increased accountability within the insurance industry.
