Nepal Insurance Authority (NIA) has issued a directive to all life and micro-life insurance companies, instructing them to include renewal premiums and term-life insurance premiums in their business target plan for the upcoming fiscal year. The move is aimed at improving the quality and sustainability of insurance services.
In a circular sent to insurers, the regulator emphasized that when setting business targets for employees, branches, regional offices, and departments, companies must go beyond focusing solely on first-year premiums. They are now required to incorporate renewal premiums and premiums from term-life policies into their planning frameworks.
The directive comes in response to growing concerns that insurers have been disproportionately prioritizing high-value, single-payment policies at the expense of broader insurance access. This has reportedly limited coverage among lower-income groups and led to a rise in policy lapses and surrenders before maturity, undermining the reliability of insurance protection.
Executive Director and spokesperson for the NIA, Susil Dev Subedi, stated that these trends have posed challenges to delivering consistent, trustworthy insurance services. The directive seeks to realign insurers' business strategies with the long-term goals of financial inclusion and sustainable risk protection.
