Kathmandu – The Independent Power Producers’ Association, Nepal (IPPAN), has urged the Insurance Board (Nepal Beema Pradhikaran) to implement the agreement reached with the Nepal Insurers’ Association regarding the detariffing of insurance for hydropower projects.

On Tuesday, an IPPAN delegation led by President Ganesh Karki met with newly appointed Chairman of the Insurance Board, Sharad Ojha, to congratulate him and to request the implementation of the agreement on detariffing.

President Karki highlighted key concerns such as the lack of insurance coverage for hydropower projects, last-minute bargaining during policy renewals, and excessive delays in claim settlements—sometimes taking six months to a year. He also requested that the Board make provisions requiring insurers to pay interest on delayed claim settlements.

The IPPAN delegation included President Ganesh Karki, Vice President Uttam Blon, General Secretary Balram Khatriwoda, Secretary Bharat Nepal, Executive Member Mithun Poudel, and CEO Bhim Gautam.

Representing the Insurance Board were Chairman Sharad Ojha, Executive Director Sushil Dev Subedi, Director Pujan Dhungel, and Deputy Director Nirmal Adhikari, among others.

Chairman Ojha expressed surprise that even with a 250% to 500% hike in premiums for hydropower insurance, reinsurers were still not seeing profits, indicating a need for further study. He noted that while the detariffing model was successful in the United States, it failed in India, suggesting that Nepal should pursue a balanced approach. He acknowledged that delays in claim settlements often occur due to insurers sending underqualified or inexperienced surveyors who submit reports late, forcing project developers to wait years for compensation.

The issue has persisted since the issuance of the “Minimum Premium Guideline for Non-Life Insurance Companies, 2078” which allowed premiums for hydropower insurance to rise as much as 500%. Former Chairman of the Insurance Board, Surya Prasad Silwal, had stated that if insurers and project developers came to a mutual agreement, detariffing would be permitted. Subsequently, IPPAN and the Nepal Insurers’ Association reached a consensus in July last year (Shrawan), and formally informed the Board. However, the Board has yet to initiate any formal process.

IPPAN insists that despite some damage caused by floods and landslides to a few projects, the majority remain safe, and thus the detariffing approach should move forward.

Vice President Uttam Blon pointed out that while Nepal’s reinsurance companies seek a fixed share in other types of insurance, they invoke the “right of refusal” in hydropower reinsurance. He urged that this provision be removed. He also highlighted how major international reinsurance firms are questioning why Nepalese reinsurers are not covering Nepal’s own hydropower projects—an issue that requires urgent intervention from the Board.

One hydropower project that has never filed a claim is now paying an annual premium of NPR 5.7 million, up from NPR 1.7 million. Other projects have also seen premium increases of up to 500%.

IPPAN Executive Member Mithun Poudel added that in the past, surveyors were mainly mechanical engineers who specialized in vehicles, leading to inaccurate assessments of hydropower project damage. He emphasized the need for the Insurance Board to classify and specialize surveyors accordingly.