Ten new life insurance cos may get licences next week

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Jasim Uddin Haroon At least 10 new operators are likely to get licences next week to enter the country's life insurance market that is considered highly under-exploited. The recipients of licences are likely to include two foreign life insurance companies --- Taiyo of Japan and LIC of India. Another foreign company based in Hong Kong has also applied for licence. As many as 77 applications were submitted until the deadline, May 15 this year. The insurance regulator has already completed scrutiny of all the applications and the five-day hearing of all the proposed firms. However, the Insurance Development and Regulatory Authority (IDRA) is expected to select 10-12 applicants for entering the market. Successful applicants will have 12 months to set up operations, once the licences are handed out in July this year. The disqualified firms will have options for appeals to the regulator as per the guidelines of new firm-registration. Maksudur Rahman, a director of proposed Swadesh Life Insurance, said: "We've applied for a life insurance company as it is sill an un-explored market." He also said: "I'm hopeful about getting a new licence as my company has complied with all the requirements." This is for the first time the companies, which sought insurance licences, were asked to deposit paid-up capitals and other fees beforehand as per the guidelines. The proposed insurance companies had to deposit Tk 180 million as paid-up capital and Tk 15 million as guarantee money through buying securities from the central bank. But less than 30 of the firms applied for licences had deposited the paid-up capital, sources said. Sources at IDRA said there were many lapses in the applications submitted by the aspiring entrepreneurs willing to set up new insurance companies. They said an individual proposed as the managing director signed for nine companies. But, the person in question admitted he had signed for only five companies. However, the entrepreneurs took more than 150 name-clearances from the Registrar of Joint Stock Companies and Firms (RJSC) for setting up of new insurance companies. The IDRA invited applications for registration of new companies on February 20 last. It extended time for submission of applications thrice following requests made by the aspiring entrepreneurs. Bangladesh has now 18 life insurance companies, with their annual turnover through premium-earning coming to worth Tk 60 billion The country's life insurance sector is still dominated by state-run Jiban Bima Corporation (JBC) and the US-based MetLife Alico.