News of Insurance – While the government has settled outstanding payments for construction businesses and agricultural insurance, COVID insurance claims remain deprioritized. The financial strain caused by the pandemic disrupted government revenue, increasing the backlog of payments. The government claims to have cleared billions in dues for construction businesses and agricultural insurance, yet COVID insurance claims remain unpaid, indicating a lack of priority in settling them.

COVID insurance was introduced in Nepal in 2019 when the pandemic began spreading globally. Generally, insurance does not cover pandemics or natural disasters like earthquakes, floods, and landslides. However, due to regulatory leniency and the inexperience of insurance companies, COVID insurance was introduced. Authorities believed divine protection from Pashupatinath would prevent widespread infections, leading to the scheme’s launch by the Insurance Board and insurance firms.

Under the policy, individuals could pay NPR 600 for coverage of up to NPR 100,000. Initially, Nepal Reinsurance Company covered 20% of the risk while insurance companies handled 80%. However, as infections surged, the Insurance Board and the Nepalese government also pledged to contribute to the payouts.

Then-Finance Minister Dr. Yubaraj Khatiwada assured government backing for the scheme during a meeting with insurance officials at the Ministry of Finance. With this guarantee, insurance companies continued issuing policies. However, as claims soared to NPR 13 billion, insurers backed out.

Settlement of Construction and Agricultural Insurance

Former Prime Minister KP Sharma Oli recently announced that all pending payments for agricultural insurance have been settled. Speaking in the House of Representatives, he stated that NPR 800 million had been transferred to the Insurance Board from state funds to clear outstanding dues. He further claimed that payments were made within 100 days to over 1.5 million dairy farmers across 35 districts.

Similarly, the government has paid over NPR 40 billion in dues to construction businesses. These firms had long complained about financial difficulties due to delayed payments from the government, particularly for completed projects. This issue had led them to stage protests against the state, prompting the government to release their payments.

Where Are the COVID Insurance Payments?

According to Insurance Board data, insurance companies still owe NPR 10.52 billion in COVID claims. Around 111,900 policyholders are awaiting payouts. Most claims are for NPR 100,000 per person, while a smaller portion covers medical expenses or lower amounts like NPR 50,000.

A 2020 agreement between the then-Insurance Board, insurance companies, reinsurance firms, and the government stipulated that insurers would cover claims up to NPR 1 billion. The Insurance Board and insurers would handle claims up to NPR 3 billion, while the government would be responsible for anything beyond that. This left the government with a liability of NPR 11.5 billion.

“The Government Must Take Responsibility for COVID Insurance”

Insurance Board Executive Director Sushil Dev Subedi emphasized that the responsibility for COVID insurance now lies solely with the government. “The government has taken full responsibility for COVID insurance. The Insurance Board has fulfilled its part,” he said. “We stopped issuing policies after realizing the flaws in the scheme. However, since the government assured responsibility for the program, they must now provide the answers.”

Despite clearing other insurance backlogs, the government’s failure to prioritize COVID insurance payouts raises concerns about accountability and fairness for policyholders.