Non-Life Insurers to Continue Farm Insurance Following Government Agreement

May 31, 2024, 10:30:42 AM |

KATHMANDU: Non-life insurance companies in Nepal have agreed to resume issuing farm insurance policies following a pivotal agreement reached with the government on Thursday. This decision emerged from a crucial meeting involving insurers, representatives from the Nepal Insurance Authority, and the Ministry of Agriculture and Livestock Development (MoALD).

The meeting, led by Minister for Agriculture Jwala Kumari Sah, resulted in insurers consenting to continue their services after the ministry committed to addressing Rs 970 million in overdue premium subsidies promptly. The government still needs to clear a total of Rs 2 billion in premium subsidies owed to farmers.

Sabnam Siwakoti, the spokesperson for the MoALD, confirmed that the ministry assured the insurers of settling the remaining subsidy amount by the end of the current fiscal year.

Since March this year, non-life insurance companies had ceased issuing farm insurance policies due to the government’s failure to pay premium subsidies from the previous fiscal year. In an effort to pressure the government to resolve the outstanding payments, insurers had also stopped processing claims for insured farm products over the past month.

Introduced with much fanfare in January 2013, the government’s crops and livestock insurance program aims to provide coverage for six types of insurance, including various crops, vegetables, cereals, fruits, poultry, fishery, cattle, and other farm animals.

The Nepal Insurance Authority mandated both life and non-life insurers to allocate at least five percent of their policies to microinsurance, including farm insurance.

To enhance the program’s effectiveness, the government initially offered a 50 percent subsidy on insurance premiums, which was later increased to 80 percent. This move was designed to encourage farmer participation and support the agricultural sector.

With the latest agreement, farmers can expect continued access to essential insurance coverage, securing their livelihoods and contributing to the stability of Nepal’s agricultural economy.

Fiscal Nepal |

Friday May 31, 2024, 10:30:42 AM |