NIA to Establish Judicial Bench for Faster Insurance Claim Settlements
The Nepal Insurance Authority (NIA) has initiated the process of setting up a judicial bench to enhance transparency and expedite the resolution of insurance claims. With increasing dissatisfaction among policyholders regarding delays in claim settlements, the regulatory body aims to address these concerns and streamline the process.
Records from the NIA indicate a rising number of complaints, as insured individuals face prolonged financial strain due to slow claim processing. Following the September 26, 2024, floods and landslides, insurance claims amounting to Rs. 12.87 billion were filed. However, over six months later, only around Rs. 3 billion has been settled, underscoring inefficiencies in claim settlements.
The backlog of complaints continues to grow, with 141 new cases registered in the first half of the current fiscal year. Over the past six years, the number of grievances has more than doubled, reaching 244 in 2023/24 from 100 in 2018/19. At present, 430 complaints remain unresolved, including 287 pending cases from the previous fiscal year. The slow settlement process has discouraged many from purchasing insurance policies.
According to NIA spokesperson Sushil Dev Subedi, the authority’s board has decided to establish a judicial bench that will function similarly to a court, where legal experts will conduct hearings in the presence of both insurers and policyholders. Most disputes stem from non-life insurance claims, where surveyors are often accused of undervaluing damages, while some insured parties are found inflating claim amounts.
The NIA, which holds the legal authority to mediate disputes, has faced criticism for delays that have led many cases to be taken to the High Court and Supreme Court. To address this, the authority plans to operationalize the judicial bench by Nepali New Year 2082 (mid-April 2025). Once fully functional, it will also publish regular updates on claim settlements, ensuring greater accountability in the insurance sector.
