The government has rejected an Anti-Corruption Commission (ACC) proposal to define the country's insurance companies as financial institutions (FIs) under the Financial Institutions Act 1993.
Officials said there is no scope to include the insurance companies in the list of financial institutions as those received license from the Insurance Development and Regulatory Authority (IDRA) in accordance with the insurance law.
Instead, the government suggested bringing the insurance companies under the ACC Act 2004 like those of the banks and financial institutions for further governance.
There are 77 insurance companies operating in the country.
The anti-graft body made the proposal recently to facilitate it taking proper actions against corruptions in the insurance companies.
It requested the bank and financial institutions division (BFID) for necessary amendment to Section 02 (B) of the law to consider insurance companies as financial institutions.
ACC chairman Iqbal Mahmood said: "We sent a letter to BFID. We've not received any update yet."
The BFID has sought opinion from Bangladesh Bank (BB) in this regard.
But, the BB argued that the activities operated by the financial institutions in the country have been defined in the Financial Institutions Act.
"The proposal is not acceptable. The ACC may bring it under its own law," said a senior official of BB.
According to Section 04 (1) of the Act, nobody can operate financial business without getting license as a financial institution from the central bank.
The insurance companies received licence under the Insurance Act 2010 to operate under the law. There are also provisions in Section 05 of the law for taking actions against any crime.
A high official at the ACC said they cannot take appropriate actions against corruption in the insurance sector as the companies were not treated as financial institutions.
The Insurance Act 2010 said the sector needs to be managed properly and be strengthened by reducing business risks and, local and international insurance laws needed to be harmonised considering the socio-economic aspects of the country, and to protect the interest of policy holders and other beneficiaries.
Insurance Development and Regulatory Authority of Bangladesh (IDRA) Chairman M Shefauqe Ahmed could not be contacted despite repeated attempts over phone and SMS.
The parliament on 03 March 2010 passed two insurance laws to further strengthen the regulatory framework and make the industry operationally vibrant. The new laws, came into effect on 18 March 2010, are Insurance Act 2010 and IDRA 2010.
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