On-the-spot inspection of insurers

THE Insurance Board said it carried out on-the-spot inspection at 23 out of 25 insurance companies at the end of the last fiscal year to pressure the insurers to settle insurance claims at the earliest. After a huge number of the claims remained unsettled last fiscal year, the regulator took control of the documents of those insurance companies to cross-check whether there is any mismatch between the documents the insurers submitted to the regulator and those they have. According to the board, 16,000 claims have remained unsettled until the last fiscal year. IB chairman Fatta Bahadur KC said they took hold of the companies’ internal audit reports to cross-match their actual financial assessment with the report that they send to the board. “The move is aimed at controlling possible irregularities in insurance companies,” said KC at an interaction on Friday. Non-life insurance companies have to manage additional 15 percent fund against the claims to be able to pay them, according to existing provision. However, board officials say the insurers prepare cheques for claims settlement and make entry of the settlement in their internal audit report, but they actually don’t pay the claims. “However, they keep on delaying the handover of the cheques to the clients showing different problems in the documents,” said Shreeman Karki, director of the board. On the other hand, many life insurance companies have been found to be switching the claims amount in a particular fiscal year to previous fiscal year in their audit report, according to the board. This practice also prompted the board to carry out on-the-spot monitoring, officials said. The companies that were not monitored were state-owned Rastriya Beema Sansthan (RBS) and Everest Insurance, whose operation has now been halted. There are 16 are non-life and nine life insurance companies. RBS is allowed to provide both life and non-life insurance services. Karki said a majority of the claims settlement problems were related to nonlife insurance. Meanwhile, only six percent of the country’s total population have received insurance services, according to the board.