August 1: All non-life insurance companies have deferred the payment of coronavirus insurance claims after the government delayed the release of the allocated budget.

 At the call of the Nepal Insurers Association, 20 non-life insurance companies have formally stopped the payment of coronavirus insurance since July 29.

The companies had been delaying in settling the claims related to coronavirus insurance since mid-April due to the delay in part of the government in releasing the budget.

The association has now informed that the payment of coronavirus insurance has been formally stopped. 

Sunil Ballabh Pant, an executive member of the association and CEO of NLG Insurance, said that the payment for Covid-19 claims has been stopped for the time being. He said that payment for Covid-19 claims was stopped as the government did not release the amount as promised.

Since the government has not released the promised money, the companies are facing difficulties in settling the claims from their funds. The decision was taken after the companies had a problem with cash flow, said Pant, adding that the claim settlement would start only after the government releases the money.

He said that a letter signed by the CEOs of all non-life insurance companies has been submitted to the Insurance Board in this regard. He said that a letter was sent to the board stating that the settlement of coronavirus insurance claims had to be stopped due to the government not releasing the budget.

Secretary at the Ministry of Finance Shishir Kumar Dhungana said that the amount was in the process of being released. He said that the ministry will decide in this regard within a week and a half.

‘Insurance companies have reported that they have suspended settling the claims for Covid-19. The closing in mid-July had caused some delays,” he said, adding that the ministry will decide shortly.

The government is due to pay over Rs 3.5 billion in coronavirus insurance as per the announcement made by the former government. So far, insurance companies have already settled coronavirus insurance claims of more than Rs 3.5 billion. However, they haven't received any amount from the Ministry of Finance.

So far, no data has been prepared on the total number of claims. As of mid-July, insurance companies estimate that there are claims for more than Rs 11 billion. Accordingly, the government will have to disburse more than Rs 7.5 billion.