The establishment of provincial offices is expected to provide respite to customers who have to travel to Kathmandu-based central offices of insurance companies for insurance claims. This problem is especially prevalent in the non-life insurance sector. According to NIA officials, the provincial offices will make the claims process more accessible and convenient for customers.
Rajuraman Paudel, executive director of NIA, said that the directive has been issued to make insurance services more accessible and easier for customers. He added that the directive will also simplify the process of paying insurance claims. Once established, payments on insurance claims can be carried out through provincial offices. This means that customers will no longer have to travel to Kathmandu-based central offices to make insurance claims. Additionally, the directive states that branch offices can also make payments on insurance claims of smaller amounts. With the new directive, NIA has made it more difficult for insurance companies to open branches in the Kathmandu valley. As many insurance companies are still city-centric, the NIA has tightened its permission to open branch offices, especially in urban areas. Although there has been growth in the number of insurance company branches outside Kathmandu, few have been opened in rural areas and districts. As per the directive, insurance companies will be allowed to open branches in Kathmandu only after opening three branches outside the valley. Furthermore, when branches are opened within the Kathmandu valley, they must be located outside the Ring Road area. Priority should be given to opening branches in municipalities of the three districts of the valley. NIA has also stated that for every three branches opened outside Kathmandu, two branches must be opened in a municipality or rural municipality. NIA has also paved the way for insurance companies to establish branches and contact offices abroad, provided they receive approval from the authority. However, the regulator has set certain conditions in this regard. According to the directive, insurance companies with a paid-up capital of at least Rs 5bn (for life insurance) and Rs 2.5bn (for non-life insurance) will be eligible to open such offices. NIA has now allowed insurance companies to open extension counters, similar to banks. Under the new directive, insurance companies can open extension counters in various locations such as transport management offices, foreign employment promotion offices, international airport complexes, customs checkpoints, and industrial complexes. However, insurance companies must obtain prior approval from NIA to open such extension counters, through which they can collect insurance fees and conduct insurance-related publicity.
