Muhith defends Ins act barring dual directorship

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FE ReportFinance Minister AMA Muhith Wednesday defended a provision of the Insurance Act, 2010 that bars directors of insurance companies from becoming directors of banking companies or financial institutions simultaneously. "The provision that bars dual directorship is a rational one as concentration of wealth to a few people is not good for any economy," Muhith told reporters after a meeting with leaders of Bangladesh Insurance Association (BIA). The meeting held at the conference room of Ministry of Finance (MoF) was attended by directors and chairmen of a number of insurance companies. The finance minister said a number of demands, including the lifting of some tariffs on insurance companies, raised by BIA would be considered. The BIA at the meeting urged the government to amendment the Insurance Act to facilitate dual directorship. BIA Chairman Sheikh Kabir Hossain, also Chairman of Sonarbangla Insurance Company, led the delegation at the meeting. After the meeting, Kabir said they placed a number of issues before the finance minister. Some of the actions taken by the Insurance Development Regulatory Authority (IDRA) had drawn criticism from the insurers, he added. "We have placed our demands to the finance minister who assured us of all-out cooperation towards solving our problems," Kabir told reporters after the meeting. He said discussion was held on devising an appropriate mechanism to invest money of 'life fund' in the share market. "A certain percentage of the 'life fund' could be invested in the capital market without hurting the interest of the policy holders," Kabir told reporters without elaborating. The IDRA has recently given a directive to the insurance companies that no director of an insurance company can take up an insurance policy of his or her business firms with the insurance company that he or she represents as director. The directive concerned has also sparked dissatisfaction among the insurance company directors. The leaders of BIA said they had requested Muhith to withdraw the regulation concerned issued by IDRA.