Finance ministry takes over insurance wing
Monday, 3 November 2008
FE Report
The insurance wing was brought Sunday under the finance ministry from the commerce ministry which is expected to bring about positive changes in the country's fast growing insurance sector, a ministry official said.
"The commerce ministry finally requested the finance ministry on the day to take the responsibility of the wing," said a finance ministry official.
The banking wing of the finance ministry that will from now on look after the insurance wing has been requested to collect laws, files and documents of the sector, he added.
The transfer of the much-talked-about wing was done as per decision taken by the advisory council almost one year ago.
The finance ministry asked the commerce ministry to transfer papers and documents relating to the insurance sector in March last. But it was delayed as the commerce ministry awaited promulgation of two new insurance ordinances.
"The ordinances have been promulgated and the last obstacle is removed," said a commerce ministry official.
The new Insurance Ordinance 2008 replaces the Insurance Act 1938 and the Insurance Rules 1958. On the other hand, the Independent Regulatory Authority Ordinance replaces the Department of Insurance.
Transferring the policy making responsibility of the insurance sector to the finance ministry was a long standing demand of the country's insurers.
The sector has been facing various problems, mainly relating to fiscal measures, only concerning the finance ministry. It is considered as a specialised industry and dealt with by the finance ministry everywhere, said the insurance sector operators.
Some new provisions such as establishment of a fund for policyholders' protection, enhancement of companies' capital base, creation of brokerage houses for insurance policies and requirement of minimum solvency, have been included in the new insurance ordinances.
The insurance sector operators said the finance ministry as a new policy maker will infuse fresh dynamism into insurance business, which is essential to fulfill the expectation of the growing sector.
There are 62 general and life insurance companies in the country. Of them, 44 are general insurance companies and 18 life insurance companies.
One life and one general insurance companies are owned by the government.
The country's insurance sector got a major boost in 1986 when private operators were allowed to operate alongside the public sector operators.
The premium income of the private insurance companies rose to Tk 20.43 billion in 2004 from Tk 360 million in 1986. The investment in the sector increased significantly over the years and went up to Tk 31.38 billion in 2004 from only Tk 350 million in 1986.
The insurance wing was brought Sunday under the finance ministry from the commerce ministry which is expected to bring about positive changes in the country's fast growing insurance sector, a ministry official said.
"The commerce ministry finally requested the finance ministry on the day to take the responsibility of the wing," said a finance ministry official.
The banking wing of the finance ministry that will from now on look after the insurance wing has been requested to collect laws, files and documents of the sector, he added.
The transfer of the much-talked-about wing was done as per decision taken by the advisory council almost one year ago.
The finance ministry asked the commerce ministry to transfer papers and documents relating to the insurance sector in March last. But it was delayed as the commerce ministry awaited promulgation of two new insurance ordinances.
"The ordinances have been promulgated and the last obstacle is removed," said a commerce ministry official.
The new Insurance Ordinance 2008 replaces the Insurance Act 1938 and the Insurance Rules 1958. On the other hand, the Independent Regulatory Authority Ordinance replaces the Department of Insurance.
Transferring the policy making responsibility of the insurance sector to the finance ministry was a long standing demand of the country's insurers.
The sector has been facing various problems, mainly relating to fiscal measures, only concerning the finance ministry. It is considered as a specialised industry and dealt with by the finance ministry everywhere, said the insurance sector operators.
Some new provisions such as establishment of a fund for policyholders' protection, enhancement of companies' capital base, creation of brokerage houses for insurance policies and requirement of minimum solvency, have been included in the new insurance ordinances.
The insurance sector operators said the finance ministry as a new policy maker will infuse fresh dynamism into insurance business, which is essential to fulfill the expectation of the growing sector.
There are 62 general and life insurance companies in the country. Of them, 44 are general insurance companies and 18 life insurance companies.
One life and one general insurance companies are owned by the government.
The country's insurance sector got a major boost in 1986 when private operators were allowed to operate alongside the public sector operators.
The premium income of the private insurance companies rose to Tk 20.43 billion in 2004 from Tk 360 million in 1986. The investment in the sector increased significantly over the years and went up to Tk 31.38 billion in 2004 from only Tk 350 million in 1986.