ISLAMABAD: National Database Registration Authority (Nadra) has agreed to reduce the cost of its verification for micro-insurance policies sold through mobile networks, internet, digital and/or non-digital modes.

The cut in the Nadra verification cost will reduce the premium for micro-insurance policies, making it affordable for low-income segments.

The decision has been made by authority on the recommendation of the Technical Committee on Insurance, formed under the National Financial Inclusion Strategy (NFIS).

NFIS was launched by the government to enhance financial inclusion across all parts of the financial sector, including banking, insurance and investments. Accordingly, the NFIS governance structure was established in the form of NFIS Council, chaired by the finance minister, and the NFIS steering committee, chaired by the Governor State Bank. The committee decided to promote micro-insurance segment by providing conducive operating environment. Micro-insurance, is the small ticket-sized insurance, aimed at those segments that remain uncovered since the insurers are reluctant to serve them due to limited commercial viability of micro-insurance products.

The cost of Nadra verification became a special concern in case of micro-insurance since it is significant in proportion to the value of micro-insurance policy and the premium and is eventually recovered from the end consumers which are policyholders in the shape of additional premium.

Therefore, in April 2017, the NFIS Technical Committee on Insurance had taken up the matter with Nadra to rationalise the verification cost for micro-insurance policies.

After extensive deliberations, Nadra agreed to offer services at the reduced rate of Rs10 per verification, from earlier fee of Rs45 per verification.

Published in Dawn, January 23rd, 2018