SBC yet to settle most part of Tk 4.45b reinsurance claims

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FE Report
State-run Sadharan Bima Corporation (SBC) is yet to settle a significant portion of its Tk 4.45-billion worth of reinsurance claims with other private insurers despite repeated efforts from the government, official sources said.
"Nearly half of the SBC's total reinsurance claims remains unsettled," said an official source, adding that a large chunk of the reinsurance claims still remained pending.
Although the commerce ministry set earlier September 30 as the deadline for the SBC for settlement a total of 366 reinsurance claims that it received from its partner insurance companies until March 2008, the corporation failed to achieve the goal.
According to sources, the commerce ministry initiated the move to streamline the settlement process of reinsurance claims following repeated appeals from the relevant general insurers.
The relevant general insurance companies are facing immense financial problems in running their business smoothly due to the non-settlement of their reinsurance claims by the SBC, they sector insiders said.
Taking the non-settlement of the reinsurance claims into account, the highest authorities of the commerce ministry held a meeting with the senior officials of the SBC a couple of months back and asked them to take necessary steps for resolving them.
Apart from the settlement of reinsurance claims, the authorities have also taken necessary steps to ensure that SBC pay insurance claims to its own policyholders accordingly, said an official.
Currently, the SBC requires settling insurance claims involving more than Tk 4.0 billion with its policyholders.
According to officials, the SBC has been doing direct insurance as well as pursuing private insurance company's reinsurance.
After the establishment of private Insurance Companies in the year 1985 in Bangladesh, the government authorised SBC to accept 100 per cent of private insurance companies.
But, according to an official provision, 50 percent of a company's reinsurance business must be placed with the SBC and remaining 50 percent may be reinsured either with SBC or with any other insurer in Bangladesh or abroad.
As the largest non-life insurance underwriter in Bangladesh in terms of gross premium, network of offices and trained manpower, the SBC is also entitled to get 50 per cent of public sector business in Bangladesh.
Official figures showed that the premium income of lone state-run SBC stood at Tk 4.90 billion in 2007 calendar year while the earning was Tk 4.41 billion in 2006.
The SBC settled some 625 claims worth Tk 1.12 billion in 2007 as against 1079 claims involving Tk 5.02 billion.
Besides, the SBC paid Tk 1.76 billion as against a total of 5174 insurance claims made by private companies during the period between 2005 and 2007, official figures revealed.