Kathmandu. The Insurance Development and Regulatory Authority of Bangladesh (IDRA) has inspected nine insurance companies across the country following allegations that various agencies have been paying commissions in different sectors despite suspension of their agency activities.
IDRA issued a press release on Tuesday. The IDRA said that on the application of the Bangladesh Insurance Association (BIA) and the consent of the non-life insurance companies, various agency activities of the non-life insurance companies have been suspended with effect from January 1 this year.
However, even after the decision came into effect, some companies continued to pay commissions in various areas, including salaries and allowances and ‘no claim bonuses’ to attract business. According to insurance industry experts, such activities are creating an environment of unhealthy competition in the insurance sector and hindering the implementation of the directives of the regulatory body. As a result, there is a fear that good governance and a level playing field could be compromised in the region.
The IDRA has set up three inspection committees to verify the veracity of the allegations and monitor compliance with existing laws and regulations. In a letter dated June 4, the Bangladesh government has directed the government to form a separate team to inspect the institutions concerned.
They are Prabhati Insurance, Paramount Insurance, Bangladesh National Insurance Company, Crystal Insurance, Asia Pacific General Insurance Plc, Union Insurance, Global Insurance, Karnaphuli Insurance, Prime Islamic Life Insurance.
IDRA said the inspection report will be submitted to the vigilance team formed by the authority. If any irregularities are found during the investigation, appropriate action will be taken against the concerned organization as per the existing laws and regulations.
IDRA member (non-life insurance) Mohammad Abu Bakr Siddiqui said the veracity of the allegations would be verified on the basis of the inspection report and if any irregularities were found, necessary action would be taken as per the law. – Agency
