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Bangladesh Insurance
Bangladesh Insurance law being amended in the interest of customers and companies.
The draft of the newly revised Bangladesh Insurance Act states that an insurer cannot help its directors or shareholders or their families or persons related to them get a loan from any bank or financial institution or anyone else by keeping its assets or investments as collateral.
In order to properly protect the interests of customers
With the aim of developing the Bangladesh Insurance sector and properly protecting the interests of customers and taking into account conflicting issues with other laws, the regulatory body Insurance Development and Regulatory Authority (IDRA) has taken the initiative to amend 50 sections of the Insurance Act-2010 to make it more up-to-date and more effective.
For the purpose of amendment, proposals for amendments, additions and deletions have been prepared after reviewing the opinions received from stakeholders at various times and the laws of other countries.
The prepared amendment draft was published on the IDRA website on March 28 for the concerned stakeholders, experts and the public to give their well-considered opinions on the draft.
Draft copy of the Bangladesh Insurance Act Amendment
Stakeholders have been requested to provide their opinions on the draft within the next 15 working days (April 24). If no comments are received within the specified time, IDRA will take the necessary steps to resolve the issue of objection or no comments.
A copy of the draft amendment to the Bangladesh Insurance Act has already been sent to the President of the Bangladesh Insurance Association, the Managing Directors or Chief Executive Officers of all life and non-life companies, the President of the Bangladesh Insurance Forum, and the Director of the Bangladesh Insurance Academy.
IDR Director (Non-Life) and Spokesperson Md. Jahangir Alam told The Daily Star, “This law was made 13 years ago. The situation has changed a lot now. So, to make the law universal, some clauses need to be clarified. Again, there are many issues of the insurance industry that are not covered in the current law.”
He also said, “Again, there is a need to add some new clauses and delete old clauses in the interest of the customers and the industry. Therefore, the law is being amended.”
Bangladesh Insurance Association Vice President AKM Monirul Haque said, “We have received the draft proposal for the amendment of the Insurance Act 2010. Many clauses are going to be added and amended. This has been welcomed in principle.”
He also said, “The BIA Executive Committee and Technical Committee will meet in a few weeks. The issues will then be discussed thoroughly and the recommendations will be submitted to the IDRA.’
The proposal to add a new clause states that an independent director means a person who is independent of the management and shareholders of the insurer and who will ensure compliance with applicable laws, rules and regulations and give opinions related to the interests of the insurer.
He will give his opinion only in the interests of the insurer and has no past, present or future interests of the insurer or any person related to the insurer.
In addition, without the approval of the IDR, the insurer will not be able to give any loan or provide any other financial benefits to its directors or shareholders or their families or their related persons from the institution or subsidiary under its control.
Every insurer will appoint the required number of actuaries as per the approval of the IDR. His qualifications, responsibilities, benefits and conditions will be determined by the regulatory body.
The current law states that every insurer registered for life Bangladesh Insurance business shall appoint an actuary as required with the approval of the IDR. His qualifications, responsibilities and other benefits and conditions shall be prescribed by regulations.
Another new addition to the proposal states that a person with the qualifications prescribed by the IDR shall be appointed as the chief financial officer or secretary of the institution as per the approval.
It further states that no chief financial officer or company secretary approved by the insurer shall be dismissed or dismissed without the prior approval of the IDR.
In this case, the IDR shall examine the concerned chief financial officer and company secretary and whether the interests of the insurer or the institution in this regard have been harmed or not and in this case, he shall be dismissed through a written order with an opportunity to defend himself.
After losing his job in this way, he shall not be eligible for employment in the Bangladesh Insurance institution for the next five years.
Another amendment to the section proposes that—If a person tries to induce any person to enter into an insurance contract with an insurer by making any statement, assurance, representation or fraudulent representation which he knows to be misleading,
false or fraudulent, he shall be guilty of this offence and shall be liable to a fine not exceeding Tk 20 lakh if the charge is proved. That person shall be liable to imprisonment for three years or to both.
Another amendment to the section proposes that—If there is no provision under the Insurance Act 2010, any director, shareholder, chief executive officer, manager or other officer of an insurer fails to comply with any provision of this Act,
The amendment proposal states
he shall be liable to a fine not exceeding Tk 10 lakh and not exceeding Tk 1 lakh and if the violation continues, an additional fine not exceeding Tk 10,000 for each day during which the violation continues.
In the current Act, which is Tk 1 lakh, Tk 50,000 and Tk 5,000.
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