Kathmandu. The state-owned Bangladeshi life insurer Jiban Bima Corporation(JBC) has appealed to the Finance Ministry to make a provision mandatory re-insurance cession for the private sector’s life insurers. It wants the private sector’s life insurers to share minimum 50 percent of their re-insurance cession with it.
The director of JBC, Jahirul Haque, has said to The Business Standard that mandatory cession is expected to add USD 58.3 million to the annual income of JBC.
Although there are currently 32 life insurance companies operating in Bangladesh, the regulatory body has not imposed any binding provisions on re-insurance. Most insurers have re-insurance agreements with the foreign reinsurers to guarantee re-insurance coverage.
The state-owned insurer has requested the Ministry of Finance in writing to make arrangements for mandatory reinsurance through the Gazette.
Recently in Nepal, the Chairman of the Insurance Board, Surya Prasad Silwal, had issued a provision that both life and non-life insurers must enter into 100 percent re-insurance agreement with indigenous reinsurers. But the decision was strongly criticized by the insurers stating that Nepali re-insurers lack capital, risk bearing capacity and technical expertise to ensure the re-insurance support for all the domestic insurance companies.