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Overspending limits life insurer's capacity to settle claims

FE REPORT | July 10, 2024 00:00:00

Sun Life Insurance Company spent an additional management cost worth Tk 570 million over five years to 2023, limiting its capacity to settle claims by the clients, the insurance regulator has found.

The Insurance Development and Regulatory Authority (IDRA) has further identified that the company has been paying much higher commission against business procurement.

It analysed the financial statements of the life insurers and presented a report on the findings at a meeting at the authority's headquarters in the capital on Sunday, meeting sources said.

IDRA Assistant Director Md Abu Mahmud presented the findings at the meeting, presided over by IDRA Chairman Mohammad Jainul Bari. CEO and Managing Director of Sun Life and other senior executives of the company were present.

"The salary and commission expenses are around 80 per cent of the company's total expenses," says the report, adding: "Nearly 90 per cent of its fund cannot be converted into liquidity."

The report observed that the investment by the life fund was a "bad investment".

The regulator asked the life insurer to prepare a report containing names and designation of its employees along with monthly payments, and another report containing the first-year business and the commission it provided to procure business.

Sun Life is a privately-owned life insurer and listed with the bourses. Its trade at the DSE closed at Tk 53.4 per share on Tuesday.

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