Kathmandu. Foreign employment term life insurance business is going to be taken away from insurance companies. As a result, the business of the insurance company is going to suffer.

The Ministry of Labour, Employment and Social Security has proposed to remove the provision of issuing foreign employment term life insurance to those going for foreign employment from private companies in the bill prepared to amend the Foreign Employment Act, 2064 BS. According to the existing Act, those going for foreign employment have to get term life insurance through private insurance companies.

At present, nepalis going for foreign employment have to keep money in three funds namely welfare fund, social security fund and foreign employment insurance. The Welfare Fund has submitted a proposal to the Ministry of Labour, Employment and Social Security to amend the Act to make the provision a single fund.

According to the data released by the Nepal Insurance Authority till Mid-May, the number of foreign employment insurance policies is 2,540,985. Foreign employment insurance has a total of Rs 3.19 billion.

Of this, Rs 2.75 billion is under life insurance and Rs 445.91 million through micro insurance. If the government merges the fund into one, then the business of insurance companies equivalent to that amount will decrease.

If the government amends the foreign employment act, the insurance company’s business will be taken away. This will hurt the life insurance business, said the executive officer (CEO) of a life insurance company. “At present, the business area of the insurance company is narrow. “If the government does not allow the funds to be kept, the business in the insurance sector will shrink further,” he said. However, this is not a big loss for the insurance business. ’

Foreign employment is a steady income path for insurance companies. Sources say that if the government stops this system, insurance companies will suffer losses in business. Insurance companies invest the insurance fee collected in this way in government bonds or other financial sectors.

Sources claim that the loss of this income of the life insurance company will weaken the investment potential. According to insurance company sources, this can affect the overall capital structure. Dwarika Upreti, executive director of the Foreign Employment Board, said that this arrangement will benefit the workers.

“At present, Nepalis going for foreign employment have to deposit money in various funds. This is creating trouble for the workers. Upreti said, “The issue of merging this fund has been raised keeping in mind the convenience of the workers. However, it is yet to be decided whether this will be implemented or not. ’

According to the provision of registration in different funds, the workers going for foreign employment have to submit documents at different places. As a result, the workers complain that the process has become cumbersome, he said.