A process is underway to frame a new insurance corporation act with necessary amendment to the country's existing act in line with the two new insurance laws, officials said.
The Bank and Financial Institutions Division (BFID) has prepared a draft of 'The Insurance Corporation Act 2015', incorporating a good number of provisions including enhancement of paid-up capitals of two state-owned insurance companies. The new paid-up capital for Sadharan Bima Corporation (SBC) will be about Tk 1.25 billion and for Jiban Bima Corporation (JBC) Tk 300 million, they said.
Some Tk 5.0 billion and Tk 3.0 billion have also been proposed as authorised capital for SBC and JBC respectively in the draft act, they added.
Establishing two separate divisions has been proposed to deal with insurance and re-insurance processes of the SBC.
A new sub-section has been included in the proposed act for the JBC to deal with re-insurance processes like SBC. Besides, three alternative proposals have been made relating to re-insurance of public assets by the SBC.
Ensuring audit activities of the SBC and JBC by the Office of Comptroller and Auditor General (OCAG) has also been proposed in the new insurance corporation act.
The boards of directors of the state-run insurance companies have been proposed to be strengthened for ensuring internal control of the two corporations, according to the draft.
A number of conditions for becoming a director of the board have been included in the proposed act.
A proposal has also been made to increase the amount of fine for violating re-insurance rules.
In April last, the draft for amending the insurance act 1973 was prepared through an inter-ministerial meeting which was earlier presented to the finance minister for his opinion. He advised to discuss the same with the chairmen of the two corporations and take their opinions in this connection, according to the BFID.
The draft was fine tuned after scrutinising and discussing it with the chairmen of the two state-run insurance companies.
The move has been taken to abolish the existing insurance corporation act, 1973 mainly to remove dissimilarity between the Insurance Act and the Insurance Development and Regulatory Authority Act 2010, they said.
Speaking on the issue secretary of BFID Dr M Aslam Alam told the FE that the amendment was being made to bring conformity between the Insurance Act 2010 and the Insurance Development and Regulatory Authority Act 2010.
He said raising paid-up capital would help the companies to do better business.
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