The government on Wednesday appointed an acting chairman to the country's insurance regulatory body, but it still lacks a quorum of three members needed to make decisions for the insurance industry, a major financial sector.
Presently, there are a total of 79 firms, including two government corporations, in the insurance sector regulated by the Insurance Development and Regulatory Authority (IDRA).
For the last one week, the post of the chairman of IDRA had been lying vacant.
The government appointed Dr M Mosharrof Hossain as the acting chairman, but the quorum crisis still remains, as he has already been serving as a member.
According to a circular issued by the Financial Institutions Division, Dr Hossain will serve as the acting chairman as an additional duty. With him, there are now only two members at IDRA. The other member is Mr Dalil Uddin.
As per the Insurance Act of 2010, a quorum of at least three members, including the chairman, are needed to make any decisions.
The Act requires IDRA to have a total of five members, including the chairman. But in its nearly one decade of existence, the regulatory body rarely saw five members at a time.
When contacted, Acting Chairman Dr Hossain told the FE: "We would be able to make decisions, but convening a meeting will be difficult [due to lack of quorum]".
Asked for comment, a CEO of a leading non-life insurance company told the FE that the government should appoint at least one member to IDRA to facilitate decision-making for the industry.
"Quorum should be formed for the sake of making decisions and this is possible simply by appointing a new member," he said, declining to be named.
Sheikh Kabir Hossain, president of the Bangladesh Insurance Association, a platform of privately owned life and non-life insurers, told the FE that the post of a member (non-life insurance) remained vacant for long, affecting this particular sector.
"Actually, we are in favour of a full IDRA Board needed to make the insurance sector vibrant."
Mr Hossain, also the chairman of Sonar Bangla, a leading non-life insurer, said the IDRA had also previously faced similar crisis as in the present time.
Insiders at both the Financial Institutions Division and the IDRA told the FE that appointing a regular chairman would take time.
Bangladesh has now 77 privately owned life and non-life insurance companies with a combined annual turnover of around Tk 135 billion.
The government formed the IDRA in 2011 replacing the then department of insurance with a view to bringing discipline and making a vibrant insurance industry.
jasimharoon@yahoo.com