The Nepali insurance board, Beema Samiti, is reportedly preparing to release guidelines in March 2012 for various microinsurance programs intended to serve low-income and rural populations. While local insurance companies are pessimistic about the profitability of microinsurance, they are now prepared to handle losses of two to four percent during an initial phase, according to a statement attributed to Beema Samiti spokesperson Shekhar Aryal. The guidelines are being created by a taskforce made up of two Beema Samiti officials and one representative from each of six unnamed insurance companies.
Within microinsurance, Beema Samiti recognizes the following short-term insurances meant for: health, accident, crop and livestock policies. The regulator projects that the majority of its microinsurance clients will be from the agricultural sector, but it plans to encourage insurance companies to also insure microenterprises and their equipment such as water mills, tea shops, rickshaws and vending carts. Further details on the microinsurance guidelines have not yet been released.
The 41 Nepali microfinance institutions that report data to the US-based nonprofit Microfinance Information Exchange held an aggregate gross loan portfolio of USD 153 million disbursed to approximately 719,000 borrowers in 2010.
By Charlotte Newman, Research Associate
About Beema Samiti
Beema Samiti, the Nepali insurance board, was established under the Insurance Act of 1992 and operates as an agency of the Nepalese Ministry of Finance. Beema Samiti’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, dismisses the licenses of insurance companies, insurance surveyors and insurance agents.
Sources and Additional Resources:
The Himalayan Times: “Microinsurance to be Launched Soon,” http://www.thehimalayantimes.com/fullNews.php?headline=Micro-insurance+to+be+launched+soon+&NewsID=320320
MicroCapital.org story, December 19, 2011, “MICROCAPITAL BRIEF: Nepal to Introduce Microinsurance Fund, Deems Work of NGOs Offering Microinsurance ‘Illegal’ Unless Working with Licensed Insurance Companies,” https://www.microcapital.org/microcapital-brief-nepal-to-introduce-microinsurance-fund-deems-work-of-ngos-offering-microinsurance-illegal-unless-working-with-licensed-insurance-companies/
MicroCapital Universe Profile: Beema Samiti
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Beema+Samiti+%28Insurance+Board%29
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