Nepal’s Outdated Death Rate Schedule: A Call for Change
Kathmandu is buzzing, and it’s not just the vibrant streets of the city. After 15 long years, Nepal’s death rate schedule remains stagnant, leaving the insurance market stuck in a time warp. The Nepal Insurance Authority (NEA) first rolled out this crucial mortality table back in 2066 BS, and since then, it seems like progress has been turned down to a whisper.
A Historical Context: From India to Nepal
Before the introduction of the locally devised death rate schedule, insurers relied heavily on Indian mortality tables to set life insurance premiums. At that time, the average age of Nepalese citizens was a mere 60.4 years, according to the 2058 national census. Fast forward to the 2011 census, where that figure soared to 71.3 years, revealing a significant shift in life expectancy—an increase of 14 years! This boost is not just a number; it reflects a growing awareness among consumers and an increase in overall per capita income.
The Need for an Updated Mortality Table
Despite the astonishing rise in life expectancy and the growing, sophisticated underwriting capacities of life insurers, consumers today are still paying premiums based on outdated figures. This outdated schedule leads to exorbitantly high insurance costs, ultimately affecting the affordability and accessibility of life insurance in Nepal.
New Data Available: Where’s the Update?
The silver lining? Plenty of new data is readily available to prepare an updated mortality table. Given that life insurers are using advanced software to manage insurance transactions, the risk of data errors has dramatically decreased. So, the pressing question remains: Why hasn’t the NEA updated the death rate schedule?
Nirmal Adhikari, Information Officer of the Nepal Insurance Authority, has stated that despite multiple attempts to revise the death rate schedule, progress has been frustratingly slow. Two years ago, they collected data with assurances from the World Bank for support, but the momentum has fizzled out. "
Attempts at Reform: A Three-Chair Saga
Chiranjibi Chapagain Leads the Charge
In 2075 BS, under the leadership of then-chairman Chiranjibi Chapagain, the NEA began its quest to gather data for a new project aimed at updating the death rate schedule. A decade of discussions and data collection culminated in a glimmer of hope but ultimately fell flat.
Surya Prasad Silwal’s Tenure
The momentum shifted when Surya Prasad Silwal took over as chairman in 2077 BS. A series of interactive programs aimed at gathering input from life insurers and other stakeholders took place, yet as of April 2082, significant progress remains elusive.
Current Leadership: Sharad Ojha’s Challenges
Sharad Ojha stepped up in 2081, but the challenges endure. Despite extensive research and efforts, the revision of the death rate table appears to be languishing in bureaucratic red tape.
India’s Proactive Approach: A Stark Contrast
Learning from India’s Experience
India has been proactive in revising its mortality tables, implementing changes five times since 2001. Their last update, based on data from 2012-2015, came into effect in 2023. With regular updates, they ensure their insurance policies reflect current life expectancies and demographic changes.
A Mortality Table: Understanding Its Importance
What is a Mortality Table?
A mortality table lists the likelihood of death for individuals across various age groups, crucial for pricing in the life insurance sector. Factors such as age, gender, occupation, health status, and geographic location play significant roles in determining insurance premiums.
Why is it Necessary?
The tables not only aid in pricing and risk management for life insurance but also reflect advancements in healthcare and changing demographic dynamics. As society evolves, so must our understanding of mortality.
The Future of Nepal’s Life Insurance Market
The lack of an updated mortality table continues to hamper Nepal’s life insurance landscape. With potential support from donor organizations and collaborative efforts from educational institutions like Tribhuvan University, there is hope for a more robust approach to revising the death rate schedule.
A Call to Action
The Nepal Insurance Authority has the opportunity to utilize funds collected from regulatory fees to launch this much-needed research project. It’s time for Nepal to step into the future, ensuring that its life insurance policies mirror the realities of modern life expectancy.
Conclusion: Breaking the Silence
In a world where information and technology are rapidly evolving, Nepal’s life insurance sector must not remain shackled to outdated data. It is imperative for both the NEA and life insurers to recognize the significance of updating these tables and the positive impact it would have on the citizens they’re meant to protect.
For further insights on mortality tables and their implications, visit the World Health Organization or the Nepal Insurance Authority.
