Businesses urge govt not to implement IDRA decisions

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FE Report Country's business leaders Monday demanded of the government not to implement the decisions taken by the insurance regulatory authority as they say those will harm the development of insurance business. They also called upon the government not to allow the chairman of the Insurance Development and Regulatory Authority (IDRA) to take any decision further regarding the insurance business and impose penalty against the insurance companies. "We call upon the IDRA to withhold its decisions taken so far and hold a meeting with the stakeholders so that the sector can move forward smoothly," Chairman of Bangladesh Insurance Association (BIA) Sheikh Kabir Hossain told the media after a meeting with the high-ups of insurance companies at Dhaka Club in the capital. He said the decisions taken by IDRA will not allow a person to become director of two financial institutions at a time which is not business friendly at all. He also slammed the move by the regulator to impose penalty against the insurance companies. Mr Hossain, who is also the chairman of Sonar Bangla Insurance Limited says they (insurers) have proposed to the Dhaka Stock Exchange Authorities to allow investment of life insurance companies fund to the share market for the benefit of the country's economy. President of Federation of Bangladesh Chambers of Commerce and Industries (FBCCI) AK Azad has said the circular which the insurance regulator issued is completely harmful to the insurance businesses and it was done without any consultations with the stakeholders. He demanded of the government not to allow the chairman of IDRA M Shefaque Ahmed to take any decisions further and impose any penalty on the insurers. "We think he lacks experience on the insurance business. We will meet the finance minister to discuss the matter. We also have a plan to meet the Prime Minister on the issue," Mr Azad added. The IDRA in its recent circular said from now on, directors of any insurance company will not be able to hold the similar posts in other financial institutions (FIs) at a time. The regulator has asked all insurance companies to strictly comply with the provision of Insurance Act of 2010. The IDRA has asked all insurers to submit names of directors, if any, who have been holding directorship simultaneously in more than one insurance company and also in financial institutions by October 16. But the directors of insurance companies have been opposing the provision since the government enacted the insurance law. IDRA issued the circular in line with the Insurance Act of 2010 (75) which barred an individual from becoming the director of a bank, financial institution or an insurance company at a time. IDRA officials said this is for establishing transparency in the insurance sector and addressing the conflict of interests. A banking company will be defined in accordance with the Bank Company Act of 1991, while a financial institution will be defined in accordance with the Financial Institution Act of 1993, the circular said. According to the Bank Company Act, 1991 (BCA, 1991), an individual is not allowed to become a director of more than one banking company or more than one financial institution or more than one insurance company at a time. The similar provision is also there in the Financial Institution Act, 1993 (FIA, 1993). Insurance Act, 2010 disqualifies an individual director of an insurance company from becoming director of a banking company or financial institution at a time. President of Dhaka Chamber of Commerce and Industry (DCCI) Asif Ibrahim, president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) Md Shafiul Islam Mohiuddin and head of leading insurance companies, among others, were present at the meeting.