Kathmandu – The Nepal Insurance Authority is facing difficulties in meeting the targets it set for itself. The Authority had earlier announced that it would commence a quasi-judicial hearing bench starting from the Nepali New Year, 1st Baisakh 2082 (April 13, 2025). However, despite this ambitious announcement, the implementation has not moved forward as expected, with the necessary procedures still not finalized.

Following the appointment of a new chairman, the Authority had hoped to operate with renewed momentum. However, the lack of a finalized working procedure has hindered the progress, raising questions about the regulator’s consistency and commitment, especially in overseeing the operations of insurance companies.

Delay in Finalizing Procedures

In Falgun (February/March), the Authority declared that all insurance-related complaints would be handled through a formal hearing bench. While the bench was scheduled to begin proceedings from Baisakh, the procedures governing the hearings are still incomplete. According to Ranjita KC from the Authority’s Complaint Division, internal transfers and promotions have caused delays in finalizing the operational guidelines.

“The Authority aims to run the hearing bench by bringing both the complainant and the respondent together for judicial resolution,” KC explained. The board of directors had officially decided that all complaints would now be resolved through this new quasi-judicial process.

Rising Complaints, Government-Style Delays

Nepal’s insurance sector continues to suffer from negative public perception, primarily due to dissatisfaction over claim settlements and poor complaint resolution. The number of complaints filed by policyholders has been increasing annually, highlighting inefficiencies in the system.

According to data from the Insurance Authority, a total of 1,804 complaints were registered over the past six fiscal years. Complaints have risen by 133% during this period, largely due to delayed responses and lack of proper mechanisms to address them in time.

Annual Complaint Breakdown

In the fiscal year 2080/81 (2023/24), the Authority received a total of 437 complaints, of which 244 were newly registered. The remaining 192 were carried over from the previous year. Out of the total, 150 complaints were resolved—101 through decisions and 49 through mediation. However, 287 complaints remain pending and have been carried over into the current fiscal year 2081/82.

Here’s a breakdown of previous years:

• 2075/76: 187 complaints (83 old, 4 re-appeals, 100 new);
• 2076/77: 187 total (126 new); 91 resolved, 135 pending;
• 2077/78: 273 complaints; 93 resolved;
• 2078/79: 338 complaints; 152 resolved;
• 2079/80: 341 complaints; 149 resolved.

Despite increasing complaints, the Authority has yet to finalize the procedures required to operate the hearing bench, delaying the promised reforms.

Move Towards Quasi-Judicial Proceedings

In response to the backlog, the Authority is now attempting to establish a formal judicial bench, similar to a district court, to handle insurance-related disputes. Both insurers and policyholders will be allowed to present their cases through legal representatives.

The bench will comprise five members, including the chairperson, and decisions will be made based on a majority vote of at least three members. Proceedings and verdicts will be published on the Authority’s website to ensure transparency.

This move is intended to streamline the handling of the increasing volume of complaints and ensure timely justice in the insurance sector—though the slow pace of implementation remains a concern.