30 August 2024, Kathmandu
Significant legal action is brewing as non-life insurance companies prepare to seek justice in the Supreme Court over unresolved COVID-19 insurance claims.
Insurance Companies to File Supreme Court
The Nepal Insurance Association, representing various insurers, is set to challenge the government’s failure to honour its financial obligations related to pandemic insurance.
The crux of the issue lies in the government’s unfulfilled promise to cover insurance claims exceeding NPR 3.5 billion. Insurers are still waiting for approximately NPR 11 billion in claims that remain unpaid. This situation has escalated to the point where insurance companies, having resumed the sale of COVID-19 insurance policies under the assumption that the government would uphold its commitment, now face a critical juncture.
According to sources within the Nepal Insurance Association, a formal case will be filed in the Supreme Court next Sunday. The association has coordinated with Pioneer Law Firm for legal assistance in this matter. The lawsuit aims to compel the government to meet its financial obligations and prevent further disruption to the insurance market.
The dispute originated when the government pledged to cover the costs of insurance claims that exceeded NPR 3.5 billion. However, despite this assurance, insurers have not received the promised support, leading to substantial financial strain on the insurance sector. As a result, the insurance market has started to show signs of distress, with many companies facing potential collapse if the issue remains unresolved.
The insurance association asserts that the government’s failure to meet its commitments is causing significant harm to both the insurance market and the insured parties. “We sold COVID-19 insurance policies based on the government’s promise to cover excess claims,” said a source from the association. “Now, with the government trying to evade its responsibility, we are compelled to seek judicial intervention to protect the market and ensure justice for those who relied on these insurance policies.”
The legal challenge highlights the broader implications of the government’s actions on the insurance sector, which plays a crucial role in financial stability and consumer protection. By pursuing this case, the insurance companies hope to secure a resolution that will safeguard the industry and uphold the promises made to policyholders during the pandemic.
For further updates on this legal battle and its impact on the insurance market, stakeholders and the public are encouraged to follow developments as the case progresses in the Supreme Court.
Insurance Companies to File Supreme Court
