Don???t hike premiums, warns IB

The Insurance Board (IB) has warned non-life insurance companies not to increase their premiums in a circular issued recently. It has also barred them from stipulating new conditions and extending the apprehension period, the time after which an insurance policy becomes active.

The IB’s move followed reports that insurers had been hiking their premiums after encountering a surge in policy buyers in the wake of the devastating April earthquake.

“We came up with the step after receiving a number of complaints that insurance companies had increased their premiums by as much as two-fold,” said Shree Man Karki, director of the board.

Following the earthquake, insurance companies are reported to have been besieged by policy buyers wishing to insure their houses. Taking advantage of the rush, insurance companies had increased the premiums. Karki said premiums could be revised only with the approval of the IB’s board meeting.

Meanwhile, insurers have stipulated a period of two weeks to activate an insurance policy when the law says that it becomes valid on the day of purchase. According to Karki, they have asked insurance companies to stick to the existing provision.