Muhith for a few changes in insurance bills

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FE Report
Insurance bills are expected to be passed in the upcoming session of Parliament with some amendments, Finance Minister AMA Muhith told the FE.
"I will pilot the bills in Parliament but they will be passed with some amendments," he said.
The next session will begin on January 4 and on the inaugural day, President Zillur Rahman will address the House.
Mr Muhith on July 9 placed the Insurance Bill 2009 and the Insurance Regulatory Authority Bill 2009 before the Jatiyo Sangsad (JS) to pave the way for strengthening the regulatory process of the insurance sector.
The standing committee after scrutiny submitted the bills to Parliament in September.
The finance minister had some disagreements with the standing committee over a few clauses of the bills but eventually the committee ignored his suggestions.
The minister proposed that there should not be any restriction on the appointment of the chief of the insurance regulatory authority.
He argued that appointment of a person to the highest position should be open.
Chairman of the standing committee on finance AHM Mostafa Kamal and member Ali Ashraf said insurance being a highly specialised and technical field needs persons with insurance background.
They, however, said if an experienced person is not available then an MBA, chartered accountant, lawyer, economist or statistician may be appointed as the chief insurance regulator.
The minister also suggested that the number of directors of an insurance company be limited to 15 persons. He also felt that a director of an insurance company should not be a member of the board of any bank or any other insurance company.
Mr Kamal in his argument said Prime Minister Sheikh Hasina during her earlier tenure introduced a law where director of a bank could be on the board of an insurance company and it would not be wise to deviate from that provision.
He also said under the Securities and Exchange Commission regulations the maximum number of directors on the board of a listed company is 20 and this should be upheld.
He said that an insurance company board should have 12 sponsor directors, 6 directors from shareholders and two independent directors.
The standing committee agreed with the chairman's view.
However, both - the finance minister and standing committee -- agreed on the amount of capital of the insurance companies.
The Insurance bill 2009 says that the paid-up capital for a life insurance company will be Tk 300 million from the existing Tk 75 million and for a general insurance Tk 400 million from Tk the existing 150 million.
A parliament source said it is not possible to pass a bill without the consent of the minister concerned.
"The finance minister can seek amendment in the bills or propose to send it back to the standing committee for further review," he said.
The minister can also propose that the bill be sent to 'select committee' for further scrutiny, he added.
A total of 62 insurance companies are operating in the country and they earned Tk 42.5 billion in premium last year.
The proposed Insurance Act 2009 said the sector needs to be managed properly and be strengthened by reducing business risks, and local and international insurance laws need to be harmonised considering the socio-economic aspects of the country.
The Insurance Regulatory Authority Act 2009 said there is an increasing need to regulate one of the largest sectors in the country, harmonise local and international insurance laws considering the socio-economic aspects of the country, and protect the interests of policy-holders and other related beneficiaries.
The insurance act proposed that insurance companies to be categorised as 'life' and 'non-life' instead of 'life' and 'general.'
The Insurance Act will replace the Insurance Act 1938, and after the enactment of the Insurance Regulatory Authority Act, the Insurance Directorate under the commerce ministry will be dissolved.