KP Sharma

Despite the government’s claim that work has begun to increase rural life insurance premiums from Nu 30,000 to Nu 150,000, progress has been slow, according to the Members of Parliament (MPs).

Bringing the issue to the forefront during the question-and-answer session at the National Assembly yesterday, several MPs expressed dissatisfaction with the delays, questioning the government’s rationale.

Khengkhar-Weringla MP, Dorji Wangmo, pointed out that during the election campaign, the government had stated that research on the matter was completed.

She enquired about an update on the research and requested a timeline or decision regarding the implementation of the proposed increase in rural life insurance premiums.

She added that in the last session of Parliament, the finance minister had responded by stressing the need to strengthen the country’s economy before proceeding with the plan.

Responding to these queries, Finance Minister Lekey Dorji stated that work had already begun with the launch of the 13th Plan.

While acknowledging the importance of the pledge, he said that the government was unable to prioritise it for immediate implementation due to the economy’s slow recovery.

Lyonpo added that the government was reviewing the modalities and regulations for implementation. He explained that current financial service rules allow only one insurance company to provide rural life insurance. Creating a monopoly, he said, would not only be costly for the government in terms of subsidies but would also violate Section 10 of Article 9 of the Constitution.

This section mandates the state to encourage private sector development and prevent commercial monopolies.

To address the issue, the finance ministry has written to the Royal Monetary Authority, requesting amendments to existing rules.

The government has proposed allowing both insurance companies to handle rural life insurance, and the matter is expected to be tabled in Parliament during the summer session.

Meanwhile,  Lingmukha-Toedwang MP, Namgay Wangchuk, raised concerns about the previous Nu 700 rural insurance scheme, which provided a payout of Nu 100,000, compared to the Nu 87 scheme that offered Nu 30,000.

He questioned the rationale behind discontinuing the higher-payout option.

In response, Lyonpo clarified that the decision was made by the Royal Insurance Corporation of Bhutan Limited (RICBL), independent of government intervention.

He explained that the scheme was discontinued due to financial losses incurred by RICBL from handling multiple claims simultaneously.