Kathmandu. The Oriental Insurance Company has been found to be in a dilemma for violating the insurance and reinsurance laws of the Hilton Hotel. There was a provision to pay the claim of the damage caused by the riots to the Nepal Re-Insurance Company. However, when this company provided such insurance to Himalayan Insurance Company, the insurance claim payment of Kheri Hilton Hotel became confusing.

The Hilton Hotel is insured by The Oriental Insurance Company. The hotel was completely damaged due to the Genji agitation on September 23-24. The hotel was built at a cost of Rs 8 billion and has insured buildings worth Rs 5 billion. The hotel has been unable to pay insurance claims worth Rs 5 billion.

An official of the Nepal Insurance Authority said that the insurance company has sent the insurance risk to other alternative reinsurance structures instead of using the Nepal Reinsurance System. The reinsurance agreement has been made through Nepal Re-Insurance Company and other companies have been made. As a result, the legal basis for payment of claim has become disputed.

“Insurance companies in Nepal can only insure the riots in Nepal Reinsurance, in the sense that they should claim the loss of Hilton due to the Jenji agitation on September 23 and 24. An official of the Insurance Authority said.

According to an insurance expert, the reinsurance process is especially sensitive to risks such as riots and unrest. In such a situation, a certain percentage of the insurance risk is borne by the insurance company and the rest is shared with the reinsurance companies.

According to a source at NEA, the insurance company has to pay 35 percent of the claims for the damages caused by the riots while the remaining 65 claims will be paid by the reinsurance company. However, there is an arrangement for reinsurance of the bully class with international reinsurance companies through Nepal Insurance.

At Oriental Insurance, Hilton’s insurance was done by Alliant Re-Insurance Broker Company. The insurance authority has already taken action against the broker company for providing insurance to Nepal Re-Insurance Company in Himalayan Re-Insurance. The authority has taken action against the company as per the decision as per clause (e) of sub-section (1) of Section 134 of the Insurance Act, 2079.

In this case, Nepal Insurance Authority has already taken action against Oriental Insurance Company for violating the provisions as per clause (a) of sub-section (4) of Section 138 of the Insurance Act, 2079. Similarly, the same action has been taken against Himalayan Reinsurance Company in the same incident.

Although the Insurance Authority has already taken action against the insurance company, there is still confusion about who will pay the insurance claim of the Hilton Hotel. He said that the board meeting of the Insurance Authority of Nepal will make a plan on how to take the issue to a conclusion.