The Nepal Insurance Authority, the regulatory body overseeing the insurance sector, has initiated open bench hearings to address complaints and disputes related to the sector. This mechanism was launched last Thursday following provisions outlined in the Insurance Act, 2022, and the Insurance Regulation, 2024.

The regulation, issued in between mid-February and mid-March, mandates that the Authority conduct complaint hearings in a transparent and open manner. It also allows both complainants and respondents to present their claims through legal representatives or authorized agents.

Based on these provisions, the Authority has now begun holding public hearings through an open bench system. The bench is chaired by the Authority’s chairperson and includes board members as ex officio members. Decisions on complaints are made by majority vote among three members of the bench. Until now, such complaints were reviewed and decided upon by the Authority’s board of directors, which issued remarks and recommendations after internal assessments.

Director Shambhuraj Lamichhane stated that the open bench was introduced to ensure transparency in the complaint-handling process. “The Act and Regulation both require open and transparent hearings,” he said. “The system also allows both parties—complainant and insurer—to present their case through legal professionals or authorized agents.”

The Insurance Authority has been granted quasi-judicial powers equivalent to that of a district court to adjudicate insurance-related disputes. If dissatisfied with the Authority’s decision, parties can appeal to the High Court and, subsequently, the Supreme Court.

Under the Insurance Act, policyholders are entitled to file complaints with the Authority if insurers fail to settle claims within the timeframe specified in the policy, fail to determine liabilities, or determine liabilities in a way that adversely affects the insured party. In such cases, the Authority may facilitate settlements, order compensation, instruct insurers to reassess liabilities, or issue other appropriate directives.

If a party is not satisfied with the Authority’s decision, the Act allows them to file an appeal at the High Court within 35 days. Meanwhile, the Regulation requires complainants to lodge complaints within three months of experiencing harm. Once a complaint is registered, the Authority must set a date for proceedings and initiate necessary actions as per the Regulation.

The volume of complaints lodged with the Authority has also been rising. According to official data, 437 complaints were filed during the last fiscal year. As of mid-May in the current fiscal year, that number has already reached 488, with 292 cases still pending resolution.