Draft laws await advisers' nod to revitalise insurance sector
Saturday, 14 July 2007
Jasim Uddin Haroon
The government is going to replace the existing insurance act shortly to protect the interests of policyholders and, at the same time, revitalise the country's insurance sector.
Two separate drafts, one meant for the "Taqaful" (Islamic insurance) and the other covering the other general and life insurance companies, have already been formulated to this effect.
The Ministry of Commerce (MoC) sent both the draft copies to the council of advisers Thursday for approval.
Currently, there are 62 insurance companies, including Taqaful, in the country of which 44 are general and 18 life insurance companies.
The companies are operating under the act of 1938 and rules of 1954.
Although the insurance companies of all the sub-continental countries used to operate under the same act, but they have, meantime, enacted new laws to cope with the needs of the day.
While talking to the FE, Commerce Secretary Feroz Ahmed said the council of advisers might approve the drafts after thorough examination.
"We have sent the drafts to the council of advisers and hope that the act might be approved by the council of advisers shortly," the commerce secretary added.
The recast act is likely to be styled as Bangladesh Insurance Regulatory Act 2007.
One chairman and four members will comprise of the regulatory body.
The chairman and members are likely to be appointed on a contractual basis and their tenure will be for three years, according to the draft of the act.
He also said the office of the Chief Controller of Insurance (CCI) under the MoC will be abolished after enactment of the new act.
Under the proposed act, the regulatory authority will hire manpower independently and collect revenues.
Currently, the office of the CCI, which has been facing manpower shortage for long, controls the country's insurance sector, collects revenues from the insurance companies by way of licence and surveyors licence renewal fees and fines.
Some new provisions, including establishment of a policyholders' protection fund, enhancement of companies' capital base, creation of brokerage houses for insurance policies and requirement of minimum solvency margin, have been included in the draft Insurance Ordinance, official sources said.
While talking to the FE, Dr Mahfuzul Haque, Chief Controller of Insurance said once the new act is implemented, the regulatory authority will function like the Securities and Exchange Commission (SEC).
"This act will ensure better services for the policy holders and we will be able to monitor the insurance companies efficiently," the CCI added.
The President of Bangladesh Insurance Association (BIA) said the new act will help flourish the sector.
The government took the move for drafting the insurance act in 2001 and it got momentum in 2004. A committee headed by the then Chief Controller of Insurance (CCI) Feroz Ahmed was formed.
The committee comprised of nine members including insurance experts from the private sector.
The government is going to replace the existing insurance act shortly to protect the interests of policyholders and, at the same time, revitalise the country's insurance sector.
Two separate drafts, one meant for the "Taqaful" (Islamic insurance) and the other covering the other general and life insurance companies, have already been formulated to this effect.
The Ministry of Commerce (MoC) sent both the draft copies to the council of advisers Thursday for approval.
Currently, there are 62 insurance companies, including Taqaful, in the country of which 44 are general and 18 life insurance companies.
The companies are operating under the act of 1938 and rules of 1954.
Although the insurance companies of all the sub-continental countries used to operate under the same act, but they have, meantime, enacted new laws to cope with the needs of the day.
While talking to the FE, Commerce Secretary Feroz Ahmed said the council of advisers might approve the drafts after thorough examination.
"We have sent the drafts to the council of advisers and hope that the act might be approved by the council of advisers shortly," the commerce secretary added.
The recast act is likely to be styled as Bangladesh Insurance Regulatory Act 2007.
One chairman and four members will comprise of the regulatory body.
The chairman and members are likely to be appointed on a contractual basis and their tenure will be for three years, according to the draft of the act.
He also said the office of the Chief Controller of Insurance (CCI) under the MoC will be abolished after enactment of the new act.
Under the proposed act, the regulatory authority will hire manpower independently and collect revenues.
Currently, the office of the CCI, which has been facing manpower shortage for long, controls the country's insurance sector, collects revenues from the insurance companies by way of licence and surveyors licence renewal fees and fines.
Some new provisions, including establishment of a policyholders' protection fund, enhancement of companies' capital base, creation of brokerage houses for insurance policies and requirement of minimum solvency margin, have been included in the draft Insurance Ordinance, official sources said.
While talking to the FE, Dr Mahfuzul Haque, Chief Controller of Insurance said once the new act is implemented, the regulatory authority will function like the Securities and Exchange Commission (SEC).
"This act will ensure better services for the policy holders and we will be able to monitor the insurance companies efficiently," the CCI added.
The President of Bangladesh Insurance Association (BIA) said the new act will help flourish the sector.
The government took the move for drafting the insurance act in 2001 and it got momentum in 2004. A committee headed by the then Chief Controller of Insurance (CCI) Feroz Ahmed was formed.
The committee comprised of nine members including insurance experts from the private sector.