Insurance sector comes under finance ministry next month
Sunday, 10 February 2008
Shakhawat Hossain
The finance ministry is set to take the responsibility as new regulator of the country's growing insurance sector from the commerce ministry next month, official sources said.
The commerce ministry is seeking approval of the advisory committee later this month to leave its control over the insurance companies to the finance ministry.
"Changes in the existing Insurance Company Act 1938 have already been made to facilitate the transfer of the control over the insurance business," said a senior commerce ministry official.
He said: "Amendment to the existing insurance act is necessary to shift the responsibility of the regulatory affairs on to the finance ministry."
Once the amendment is approved by the advisory council, the finance ministry will be responsible for making policy and monitoring of the insurance sector, added the official.
The move has been made to fulfill a long-standing demand of the local insurance association.
"We will always welcome the decision as it is our long standing demand," said Bangladesh Insurance Association (BIA) secretary Nurul Islam Mollah.
He said the sector has been facing various problems, mainly relating to fiscal measures that only concern the finance ministry.
Besides, the sector is treated as specialised industry and dealt by the finance ministry everywhere, he said.
"The finance ministry as new watchdog and policy maker will bring new dynamism in the insurance business, which is essential to fulfil the expectation of the growing sector," he added.
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 has received major boost in 1986 when private operators were allowed to operate along with the public operators, said a former BIA leader.
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 it went up to Tk 31.38 billion in 2004 from only Tk 350 million in 1986, he added.
The finance ministry is set to take the responsibility as new regulator of the country's growing insurance sector from the commerce ministry next month, official sources said.
The commerce ministry is seeking approval of the advisory committee later this month to leave its control over the insurance companies to the finance ministry.
"Changes in the existing Insurance Company Act 1938 have already been made to facilitate the transfer of the control over the insurance business," said a senior commerce ministry official.
He said: "Amendment to the existing insurance act is necessary to shift the responsibility of the regulatory affairs on to the finance ministry."
Once the amendment is approved by the advisory council, the finance ministry will be responsible for making policy and monitoring of the insurance sector, added the official.
The move has been made to fulfill a long-standing demand of the local insurance association.
"We will always welcome the decision as it is our long standing demand," said Bangladesh Insurance Association (BIA) secretary Nurul Islam Mollah.
He said the sector has been facing various problems, mainly relating to fiscal measures that only concern the finance ministry.
Besides, the sector is treated as specialised industry and dealt by the finance ministry everywhere, he said.
"The finance ministry as new watchdog and policy maker will bring new dynamism in the insurance business, which is essential to fulfil the expectation of the growing sector," he added.
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 has received major boost in 1986 when private operators were allowed to operate along with the public operators, said a former BIA leader.
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 it went up to Tk 31.38 billion in 2004 from only Tk 350 million in 1986, he added.