Govt directs SBC to settle pending reinsurance claims quickly
S M Jahangir | Thursday, 28 August 2008
The state-owned insurance entity, Sadharan Bima Corporation (SBC), is under pressure from the authorities concerned for timely settlement of its pending reinsurance claims involving nearly Tk 4.45 billion with other private insurers, official sources said.
"We have already reminded the SBC to settle all the pending reinsurance claims of its partner insurers within the set timeframe, following a slow progress in the settlement process," a senior official of the commerce ministry told the FE Wednesday.
Earlier, the ministry set September 30 as the deadline for the SBC for settlement of a total of 366 reinsurance claims that it received from its partner insurance companies until March 2008. Under the set timeframe, the SBC has to settle at least 120 reinsurance claims a month, official sources said.
"The ministry is closely monitoring the progress on the settlement process so that the concerned private insurers get their reinsurance claims within the set timeframe," said a commerce ministry official.
The SBC, on the other hand, informed the commerce ministry that the Corporation had so far resolved more than 200 out of the total pending reinsurance claims while it also sped up the process of settling the remaining claims within the deadline.
According to officials, the commerce ministry has initiated the move to streamline the settlement process of reinsurance claims following repeated appeals from the concerned general insurers.
The concerned general insurance companies are facing immense financial problems in smoothly running their business due to the non-settlement of their reinsurance claims by the SBC, they said.
Against the backdrop, Commerce Adviser Hossain Zillur Rahman recently discussed the pending reinsurance claims with the senior officials of the SBC and the Department of Insurance and asked them to take necessary steps for resolving those.
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.
Presently, the SBC is required to settle insurance claims involving more than Tk 4.0 billion with its policyholders.
Presently, the SBC is doing direct insurance as well as private insurance companies' reinsurance.
After the establishment of private insurance companies in the year 1985 in Bangladesh, the government authorised the SBC to accept 100 per cent of private reinsurance business.
But, according to the Insurance Corporation (Amendment) Act 1990, fifty per cent of a company's reinsurance business must be placed with the SBC and remaining fifty per cent may be reinsured either with the 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 for the 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.
"We have already reminded the SBC to settle all the pending reinsurance claims of its partner insurers within the set timeframe, following a slow progress in the settlement process," a senior official of the commerce ministry told the FE Wednesday.
Earlier, the ministry set September 30 as the deadline for the SBC for settlement of a total of 366 reinsurance claims that it received from its partner insurance companies until March 2008. Under the set timeframe, the SBC has to settle at least 120 reinsurance claims a month, official sources said.
"The ministry is closely monitoring the progress on the settlement process so that the concerned private insurers get their reinsurance claims within the set timeframe," said a commerce ministry official.
The SBC, on the other hand, informed the commerce ministry that the Corporation had so far resolved more than 200 out of the total pending reinsurance claims while it also sped up the process of settling the remaining claims within the deadline.
According to officials, the commerce ministry has initiated the move to streamline the settlement process of reinsurance claims following repeated appeals from the concerned general insurers.
The concerned general insurance companies are facing immense financial problems in smoothly running their business due to the non-settlement of their reinsurance claims by the SBC, they said.
Against the backdrop, Commerce Adviser Hossain Zillur Rahman recently discussed the pending reinsurance claims with the senior officials of the SBC and the Department of Insurance and asked them to take necessary steps for resolving those.
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.
Presently, the SBC is required to settle insurance claims involving more than Tk 4.0 billion with its policyholders.
Presently, the SBC is doing direct insurance as well as private insurance companies' reinsurance.
After the establishment of private insurance companies in the year 1985 in Bangladesh, the government authorised the SBC to accept 100 per cent of private reinsurance business.
But, according to the Insurance Corporation (Amendment) Act 1990, fifty per cent of a company's reinsurance business must be placed with the SBC and remaining fifty per cent may be reinsured either with the 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 for the 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.