Insurance Authority Drafts Fast-Track Payout Procedure for Gen Z Movement Losses

The Nepal Insurance Authority (NIA) is preparing a special procedure to accelerate claim settlements for damages caused during the recent Gen Z movement, which saw widespread vandalism, arson, and looting. The initiative aims to ensure timely compensation under the “riot and terrorism” risk category of non-life insurance policies.

After a Sunday meeting with chief executives of non-life insurers and re-insurers, Executive Director Sushil Dev Subedi said the current claim process would lead to delays, especially because many police and ward offices were damaged and cannot easily issue the usual recommendations required for claims. The new guideline will allow payments based on minimal documentation. Under existing insurance regulations, the authority can introduce a simplified procedure for losses from non-natural disasters, and it has asked insurers and reinsurers to submit feedback within three days.

Property insurance policies in Nepal must include riot and terrorism coverage, but reinsurance for such risks is not available overseas. As a result, the entire reinsurance burden rests with Nepal Reinsurance Company (NepalRe). Insurers typically retain 35 percent of the risk themselves and pass 65 percent to NepalRe. NepalRe’s CEO Surendra Thapa noted that the company has arranged retrocession with international firms, including Hannover Re, ensuring it can meet obligations despite the heavy exposure. He added that because insurers only resumed full operations on Sunday, a complete assessment of losses will take time.

During the discussion with the authority, non-life CEOs proposed that insurers immediately settle smaller claims while reinsurers provide advance payments for larger ones and assist with liquidity management. Thapa confirmed that reinsurers are ready to cooperate on payouts.

Subedi instructed insurers to build public confidence by guaranteeing that insured parties receive their claims, to designate a focal person for data collection and payment facilitation, and to make this contact information public.

The authority also consulted the Nepal Insurance Surveyors Association (NISA) the same day. Surveyor representatives recommended allowing survey reports based on minimal paperwork, ensuring equitable work distribution among surveyors, granting easy access to damaged sites, and strengthening surveyor accountability.

The Gen Z movement caused extensive destruction in Kathmandu and beyond. Fires broke out at 21 Bhattabhateni stores, Hilton Hotel, Ncell’s central office, Global College, Central Business Park in Thapathali, and several automobile showrooms including Hyundai, Suzuki, and Tata Motors. Chaudhary Group’s factory, the Chandragiri Cable Car station, numerous corporate buildings, and private residences of business owners were also damaged. Commercial and private properties outside the capital suffered as well. Early estimates suggest insurance claims could exceed NPR 10 billion.