Insurers not making full compensation of motor accidents

KATHMANDU, March 23: The Insurance board has said some non-life insurers do not compensate damages fully in the case of motor accidents.

It said there is a tendency among insurers of closing the file after making certain compensation without confirming full damages such as human causality and injuries as well as damages to the vehicles. “In some cases, insurers have been found not compensating for prolonged treatment of the injured,” said IB Director Sriman Karki.

Amid such a trend, IB has directed the non-life insurers to first determine the total damages and make payments. “The IB move aims at boosting people’s confidence in insurance business,” said Karki, adding the board took the measure after finding a few cases of nonpayment of full damages by the insurers.

Meanwhile, the board has banned promoters having more than 1 percent stake in insurance companies to take loans by pledging more than 50 percent of their promoter’s shares. A board official said the measure was taken to make the provision compatible with central bank’s directive for banks and financial institutions.

The Nepal Rastra Bank (NRB) had put in place a such provision arguing the promoters would forget the responsibility and accountability to the company if they were allowed to put all their promoter’s shares as collateral.

The IB has also banned the promoters of insurance companies from restructuring and rescheduling of loans taken against the shares pledge.