5th October 2025, Kathmandu
The Nepal Insurance Authority (NIA) has taken a decisive action in response to the government’s declaration of two additional public holidays on October 5 and 6, 2025 (Ashoj 19 and 20, 2082), by issuing a directive mandating that all insurance companies maintain operational continuity.
NIA Directs Continuing Operations
This move stands in sharp contrast to the closure of the Nepal Stock Exchange (NEPSE) for the same period, underscoring a clear regulatory distinction between essential services and other sectors during a national emergency precipitated by adverse weather. The instruction is a direct recognition of the critical role insurance services play in safeguarding the financial and physical well-being of the populace, particularly when the threat of natural disasters is elevated.
Insurance as an Essential Public Service
The core of the Authority’s directive lies in its classification of insurance as an essential service. This classification elevates the necessity of insurance operations beyond routine business, making their continuity vital for public resilience and recovery. The NIA explicitly linked the need for uninterrupted service to the prevailing context of continuous heavy rainfall and flood-related risks across Nepal.
The rationale is clear and compelling: natural disasters, such as the floods and landslides currently threatening the country, are precisely the times when insured clients are most likely to experience losses and require immediate support. Property damage, health emergencies, and loss of life are sadly common occurrences during monsoon-related calamities, and the ability of insurance companies to process claims and address urgent concerns is paramount to helping individuals and businesses stabilize and commence recovery.
Mandated Operational Arrangements
The directive is not merely a request but a formal instruction for companies to ensure necessary operations continue during the public holidays. The Authority has provided companies with flexibility in achieving this mandate, specifically instructing them to handle urgent client concerns and claims through a dual approach:
Limited Physical Presence: Companies are directed to maintain at least a limited physical presence at their offices. This ensures that essential documents and in-person transactions, which may be unavoidable in claim processing, can still be managed.
Remote Work Capability: Where possible, companies are encouraged to utilize remote work arrangements. This allows staff to continue handling administrative, digital, and communication-based tasks from safer locations, circumventing the very travel and safety risks that led to the public holidays in the first place.
This blended approach is designed to ensure service accessibility for clients without compromising the safety of insurance personnel during the period of heightened weather risk.
The Dual Impact of Disruption
The government’s decision to declare additional public holidays and suspend long-distance transport—a measure designed to save lives and manage logistical chaos, simultaneously creates distinct challenges and mandates for different economic sectors, as seen in the comparison between NEPSE and the insurance sector.
Financial Markets (NEPSE): The closure of the stock market is seen as a necessary pause. While investors anticipate a post-Dashain liquidity surge, the market can afford a temporary cessation because its function is investment and wealth generation, which can be deferred.
Insurance Services: Conversely, the insurance sector cannot stop. Its primary function shifts from premium collection and policy issuance to risk transfer and claims settlement the moment a disaster strikes. Any delay in processing claims during a flood or landslide event would exacerbate the financial hardship on the victims, undermining the very purpose of insurance as a financial safety net. This is particularly crucial in a disaster-prone country like Nepal, where the vulnerability of property, infrastructure, and livelihoods—from the flooded Terai to the landslide-affected rural homestays of Parbat—is acute.
Sustaining Resilience and Recovery
The NIA’s proactive measure highlights a growing emphasis on disaster risk reduction and financial resilience within the Nepali regulatory framework. In a country where only a fraction of the population and property is insured, and with massive economic losses frequently recorded from natural disasters (such as the estimated $7 billion in losses from the 2015 earthquake, of which less than 1% was insured), the insurance sector is increasingly viewed as a pillar of national stability. By compelling companies to remain operational, the Authority is reinforcing the sector’s capacity to:
Expedite Recovery: Fast claims processing means people and businesses can receive funds sooner to begin repairs or reconstruction, minimizing long-term economic disruption.
Maintain Confidence: Assuring clients that their claims will be handled even during national holidays builds public trust in the insurance mechanism, which is vital for increasing insurance penetration in the long run.
In conclusion, the directive from the Nepal Insurance Authority ensures that while the nation takes a necessary break for safety and travel management, the essential financial services dedicated to recovery remain active. It is a critical instruction that aligns the industry’s operational priorities with the immediate, urgent needs of a population facing the twin threats of continuous rainfall and natural disaster risks.
For More: NIA Directs Continuing Operations