Two life insurers default on directed claim settlement

Dhaka,  Sat,  25 February 2017
Published : 17 Feb 2017, 23:47:00
printer

Two life insurers default on directed claim settlement

IDRA deadlines over with non-compliance
Jasim Uddin Haroon


Two life insurers missed deadlines set by the regulator concerned for settling policyholders' claims. They did not settle the claims despite having the means, it is alleged.

The Insurance Development and Regulatory Authority (IDRA) had set the time 45 days after hearing the parties. The timelines have already passed by, official sources said.

The regulator made the move to hear submissions following hundreds of complaints made by insurance brokers and individual policyholders against the two companies, namely, the BAIRA Life Insurance and the Golden Life Insurance.

According to the statistics submitted to the regulator, the BAIRA Life has liabilities worth nearly Tk 1.0 billion as of October 30, 2016.

But it had total investments worth only nearly Tk 470 million. The figures exclude investment in the government securities.

A life-insurance firm has to invest 30 per cent of its total life fund mandatorily. The BAIRA life firm has now Tk 900 million in life fund. So, the company is required to invest Tk 300 million in government securities.

But it has actually invested a total of Tk 160 million in the government securities, according to the IDRA.

So there is a large gap between the total asset and the liabilities.

The CEO of the BAIRA Life could not be contacted for his comment even after repeated attempts made over phone.

Similarly, Golden Life Insurance has the same position on claim settlement. And it failed to settle claims worth over Tk 460 million.

Its CEO Nur Mohammed told the FE that its asset is much higher than liabilities, but 'our investment returns have declined in recent years".

However, the regulator now plans to hear again about their failures.

"We'll take stern actions. It is our responsibility to protect the interests of the policyholders," said an official at the IDRA in the past week.

Another official at the IDRA said there are some life firms which should be merged as their financial positions are weak.

"If we prepare solvency margin rules, then such type of life firms will automatically merge with stronger ones or will be liquidated," he added.

The life firms came in the market sometime in 2000. They have yet to get listed on the bourses although there are rules that each insurer will have to float shares after three and a half years of commercial operations.

Now they are paying penalties to the regulator on a daily basis.

    jasimharoon@yahoo.com
ADDRESS
Editor : A.H.M Moazzem Hossain
Published by the Editor for International Publications Limited from Tropicana Tower (4th floor), 45, Topkhana Road, GPO Box : 2526 Dhaka- 1000 and printed by him from City Publishing House Ltd., 1 RK Mission Road, Dhaka-1000.
Telephone : PABX : 9553550 (Hunting), 9513814, 7172017 and 7172012 Fax : 880-2-9567049
Email : editor@thefinancialexpress-bd.com, fexpress68@gmail.com
Copyright © 2017. All rights reserved
Powered by : orangebdlogo
close