MICROCAPITAL BRIEF: Beema Samiti of Nepal to Sidestep Cabinet to Allow Traditional Insurers to Offer Microinsurance Starting in July 2014

The Insurance Board of Nepal (IBN), the authority charged with regulating the insurance market in Nepal, reportedly has approved the issuance of microinsurance by Nepalese insurance companies beginning in July 2014. IBN, also known as Beema Samiti, made the move after waiting fruitlessly for the country’s Cabinet to approve a similar proposal submitted in 2013. IBN’s move allows insurance companies to offer micro-life insurance and accident insurance of up to NPR 200,000 (USD 2,060) and micro-health insurance of up to NPR 35,000 (USD 365) under IBN’s regulation. As MicroCapital reported in January 2013, microinsurance has been available from cooperatives, microfinance institutions and NGOs.

Because insurers have expressed hesitance about offering micro-insurance due to the costs associated with operating small plans, IBN will permit insurance companies to use non-governmental organizations and other community groups as local agents to reduce overhead costs. According to a statement attributed to Sriman Karki, the director of IBN, these “local organisations will be allowed to sell insurance policies, collect premiums and settle claims up to a certain level.” Despite the expansion of microinsurance, Karki also reportedly stated, “[a] lot of promotional work will have to be done to ensure that lower-income people understand the importance of micro-insurance” [1].

By Benjamin Krupp, Research Associate

About Beema Samiti (Insurance Board)

The Insurance Board was established under the Insurance Act of 1992 and operates as an agency of the Nepalese Ministry of Finance. The Insurance Board’s mission is to “help develop the Nepalese economy and uplift the living standard of the Nepalese people through fair, equitable and sustainable development of the whole insurance sector.” It issues, renews and dismisses the licenses of insurance companies, insurance surveyors and insurance agents.

Additional Sources and Resources

[1] eKantipur: Micro-insurance to Be Launched Next Fiscal

MicroCapital, September 3, 2013: Nepalese Government Mandates Insurance Companies to Provide Microinsurance

MicroCapital, January 8, 2013: Nepal to Require Non-Life Insurance Companies to Introduce Agriculture, Livestock Insurance

MicroCapital, April 20, 2012: Insurance Regulatory Authority of Nepal Beema Samiti Announce Insurance Companies to Offer Microinsurance to Individuals, Agribusinesses

MicroCapital, March 8, 2011: Beema Samiti (Insurance Board) of Nepal Forms Panel to Define Microinsurance Products

MicroCapital Universe Profile: Beema Samiti (Insurance Board)

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