KATHMANDU, July 5, 2012
The poor populace will soon have better access to affordable insurance policies as the insurance regulatory authority has prepared the groundwork for micro-insurance schemes meant for the poverty ridden population.
“The final regulation meant for insurance companies regarding micro-insurance schemes is finally ready and needs to be approved by the Finance Ministry, then we will be ready to launch the programme,” informed chairman of Insurance Board Prof Dr Fatta Bahadur KC.
The board had received the final version of the regulation on Monday from the designated subcommittee. The regulation is supposed to make micro-insurance mandatory for insurance companies to expand access of insurance to the less privileged. The need for micro-insurance has been felt not only for its obvious benefits of compensating the beneficiary in case of a mishap through insurance companies but also to attract finance to agriculture and animal husbandry.
Financial access for the agriculture sector is very poor despite it engaging 66 per cent of the population and contributing to 36 per cent of GDP. Less than five per cent of the total lending portfolio of banks includes agro loans. Since the agro sector is full of unmitigated risks, it discourages financial institutions to finance agriculture and the introduction of insurance schemes such as harvest and livestock insurance will come in handy.
Nepal Rastra Bank has been encouraging insurance to garner the trust of financial institutions to finance agro loans. Since the announcement of budget 2011-12, the government and the board have been trying to introduce micro-insurance policies for the poor population, especially targeting the rural populace. Micro-insurance refers to the relatively short-term insurance meant for health, accident, crop and livestock policies. The board will direct the insurance companies to launch micro-insurance of up to Rs 100,000 to cover a majority of the population –– especially residing in rural areas and who are in urgent need of it.
Along with agro insurance, regulator is also encouraging insurance companies to insure micro enterprises such as water mills, tea shops, and rickshaws to cover the urban poor as well. “We are aiming to cover as much of the population who live below the poverty line as possible –– in rural and urban areas,” said KC.
The legal framework is almost ready but we need to prepare supporting infrastructure such as hospitals to tie up with health insurance programmes, and veterinary clinics for cattle along with developing the capacity of the insurance companies in the long run, pointed out the board’s chairman.
Board pleadsfor subsidy
Insurance Board has requested Finance Ministry to provide subsidy for micro-insurance premium in order to make these policies cheaper for poor population in the coming budget. “We have requested the ministry to subsidise certain portions of the premium that insurers have to pay to encourage micro-insurance in poor communities,” said chairman of the board Prof Dr Fatta Bahadur KC. Private insurance companies will be stepping into micro insurance apprehensively fearing loss as it means more work and less profit. The budget for 2011-12 had also depicted arrangement of providing 50 per cent subsidy on premium of crops and livestock insurance will be done.
Source: THT
The poor populace will soon have better access to affordable insurance policies as the insurance regulatory authority has prepared the groundwork for micro-insurance schemes meant for the poverty ridden population.
“The final regulation meant for insurance companies regarding micro-insurance schemes is finally ready and needs to be approved by the Finance Ministry, then we will be ready to launch the programme,” informed chairman of Insurance Board Prof Dr Fatta Bahadur KC.
The board had received the final version of the regulation on Monday from the designated subcommittee. The regulation is supposed to make micro-insurance mandatory for insurance companies to expand access of insurance to the less privileged. The need for micro-insurance has been felt not only for its obvious benefits of compensating the beneficiary in case of a mishap through insurance companies but also to attract finance to agriculture and animal husbandry.
Financial access for the agriculture sector is very poor despite it engaging 66 per cent of the population and contributing to 36 per cent of GDP. Less than five per cent of the total lending portfolio of banks includes agro loans. Since the agro sector is full of unmitigated risks, it discourages financial institutions to finance agriculture and the introduction of insurance schemes such as harvest and livestock insurance will come in handy.
Nepal Rastra Bank has been encouraging insurance to garner the trust of financial institutions to finance agro loans. Since the announcement of budget 2011-12, the government and the board have been trying to introduce micro-insurance policies for the poor population, especially targeting the rural populace. Micro-insurance refers to the relatively short-term insurance meant for health, accident, crop and livestock policies. The board will direct the insurance companies to launch micro-insurance of up to Rs 100,000 to cover a majority of the population –– especially residing in rural areas and who are in urgent need of it.
Along with agro insurance, regulator is also encouraging insurance companies to insure micro enterprises such as water mills, tea shops, and rickshaws to cover the urban poor as well. “We are aiming to cover as much of the population who live below the poverty line as possible –– in rural and urban areas,” said KC.
The legal framework is almost ready but we need to prepare supporting infrastructure such as hospitals to tie up with health insurance programmes, and veterinary clinics for cattle along with developing the capacity of the insurance companies in the long run, pointed out the board’s chairman.
Board pleadsfor subsidy
Insurance Board has requested Finance Ministry to provide subsidy for micro-insurance premium in order to make these policies cheaper for poor population in the coming budget. “We have requested the ministry to subsidise certain portions of the premium that insurers have to pay to encourage micro-insurance in poor communities,” said chairman of the board Prof Dr Fatta Bahadur KC. Private insurance companies will be stepping into micro insurance apprehensively fearing loss as it means more work and less profit. The budget for 2011-12 had also depicted arrangement of providing 50 per cent subsidy on premium of crops and livestock insurance will be done.
Source: THT
No comments:
Post a Comment