The registration of Swadesh Islami Life Insurance Company Limited has been suspended on charges of misappropriating public money.
The Insurance Development and Regulatory Authority (IDRA) has taken the action for the next three months, according to a circular issued on Monday.
The decision has been made by the insurance regulator for the company's misappropriation of loans taken against its fixed deposits.
To this effect, a letter signed by IDRA Director (Law) Md Abdul Mazid has been sent to Acting Chief Executive Officer (CEO) and Company Secretary of Swadesh Islami Life Insurance Company Ltd.
The circular says Swadesh Islami Life Insurance is required to deposit the paid-up capital in a scheduled bank without any liabilities, in accordance with Section 21(2) of the Insurance Act, 2010.
The insurance company secured a loan of Tk 140.30 million by liening or leveraging the fixed deposit held in NRBC Bank against its paid-up capital, a direct breach of the Section 21(2) of the Insurance Act 2010.
Bank lien is the lien which is often granted when the individual takes a loan from a bank to purchase an asset.
Such borrowings were not disclosed to the information inspecting officers and were not reflected in the company's financial reports.
As a result, it appears that the money has been embezzled, according to the circular.
In view of this, on December 4, 2023, under the Section 10(2) of the Insurance Act 2010, a notice showing the reasons why the registration of Swadesh Islami Life Insurance Company should not be suspended was sent by post and e-mail with giving 30-day period to reply.
The show-cause notice period expired on January 4, 2024 but the company did not file any written reply within the stipulated time.
On the other hand, a show cause is issued to present reasons why the chairman and directors of the company should not be ousted from their roles as per Section 50(1) (B) of the Insurance Act 2010 on January 4, 2024 for violating the provisions.
At the same time, in that order dated January 4, 2024, the chairman of the company and the related 11 directors were removed from their respective posts as per section 50(1) (b) of the Insurance Act 2010.
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