Nepal: Government commission suggests new proposals to improve insurance penetration
Source: Asia Insurance Review | May 2025
A high-level economic reform committee formed by the Nepalese government has suggested that insurance premiums be determined by the market in a competitive manner.
The recommendation is part of the High Level Economic Suggestion Commission’s proposals to expand insurance coverage in the country, according to local media reports.
Aside from allowing the market determine insurance premiums, other proposals of the Commission are:
- In the event that insurance companies have mobilised long-term financial instruments but do not have the appropriate financial tools for investment, arrangements should be made to issue bonds for high-return infrastructure projects targeting insurance companies.
- Concentrating all risks on domestic reinsurers is a concern. The Commission suggested ceding a certain share to foreign reinsurers for risk diversification in the insurance sector. Current regulations provide for insurers to place business with a foreign reinsurer only when the domestic reinsurer has rejected the cession.
- The government should set up of an insurance academy in collaboration with insurance companies.
- The government should support the Nepal Insurance Authority by increasing the latter’s autonomy, efficiency and capacity and enhancing good governance.
Agriculture and animal insurance premiums should be subsidised at the local level and not by the federal government. A