A high-level economic reforms committee formed by the Nepalese government has suggested that the insurance premium should be determined by the market in a competitive manner.
The committee in its final report has suggested a 7-point programme to increase the insurance spread in the country. The committee presented the final report to deputy prime minister and finance minister Bishnu Poudel in Kathmandu recently.
One of the suggestions that the committee has made is to increase the scope of insurance by deciding the premium of insurance to be determined competitively in the market. “All stakeholders should be involved in increasing insurance-related literacy and knowledge to increase mass access to insurance,” the report said.
The report has also suggested that 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 infrastructure bonds for high-return infrastructure projects targeting insurance companies.
“While approving the house construction map in urban areas, arrangements should be made to insure the house compulsorily,” the report said.
The report also said that a certain part of the reinsurance should be placed with foreign reinsurance companies to achieve a better spread and reduce the risk.
The report has suggested the setting up of an insurance academy in collaboration with insurance companies. It said the government should support the insurance authority to increase its autonomy, efficiency, capacity and good governance.
According to the report, it would be appropriate to provide for agriculture and animal insurance subsidy from the local level and not from the federal level.