Insurance Authority Tightens Mandatory National ID Requirement for Insurance, Prepares Full Implementation in Life Insurance
The Nepal Insurance Authority is set to fully enforce the mandatory national identity card requirement for life insurance transactions. Although directed to implement from Magh 1, 2081, it was only partially enforced due to practical difficulties. The Authority is now preparing a policy decision to tighten enforcement, which could affect Nepali citizens working abroad.
Kathmandu – The Nepal Insurance Authority is set to fully enforce the mandatory national identity card requirement for life insurance transactions. The Authority had directed insurers to implement this provision from Magh 1, 2081, but due to practical difficulties, insurers had only partially implemented it.
After the government made the national identity card mandatory for opening accounts and receiving services at banks and financial institutions, pressure increased to implement it in the insurance sector as well. The Authority, issuing a circular on Asar 14, 2081, had directed insurers to mandatorily include the national identity card details of the insured in all types of insurance transactions.
According to insurers, the number of insured persons is very low compared to bank account holders, and since the nature of both services is different, making the national identity card mandatory is not practical. The actual population covered by insurance in the country is relatively small. In such a situation, insurers argue that the regulator's strategy should be to bring as many people as possible under the insurance umbrella initially.
Insurers say it is appropriate to ask for necessary documents from the insured only at the stage of insurance claim payment after they have entered the insurance coverage. According to them, it would be easier for the insurance business if the insurer informs the insured or proposer at the time of purchasing the policy about the documents to be submitted in case of a claim, and gives prior notice to submit documents before receiving payment for matured claims, advance payment claims, or survival benefits.
A chief executive officer said, 'Customers visit bank branches seeking services. In life insurance, that does not happen at all. Our representatives have to go door-to-door asking people to insure.'
According to sources affiliated with the Insurance Authority, preparations are underway for a policy decision regarding the mandatory national identity card. Officials of the Authority say its mandatory requirement is necessary for anti-money laundering provisions and for the actual identification of the insured.
Meanwhile, Nepali citizens working abroad will be deprived of life insurance security benefits due to the lack of a national identity card. Nepali citizens abroad who have not been able to obtain a national identity card number are deprived of services including insurance due to lack of easy access to the national identity card. In addition, they are also deprived of the opportunity to operate bank accounts, deposit bank savings and remittance amounts in their own accounts, and invest in share transactions in Nepal.