Life insurers asked to open bank accounts for micro policy holders

Ismail Hossain The insurance regulator has asked life insurers for opening a Tk 100 bank accounts for small policy holders whose premium size is Tk 150,000. "We have directed life insurance companies to bring small policy holders into the bank net in line with the Bangladesh Bank order," said Naba Gopal Banik, a member of Insurance Development and Regulatory Authority (IDRA). He said the central bank took the decision for life insurance policyholders to use bank accounts for operating their policies in a bid to make sure they get money back at maturity. There are allegations that small life policyholders do not get money at the time of maturity as a section of company officials cheat their clients. Mr Banik said if the money is transacted under a specific bank account, the policy holders will be able to recover the money at maturity of the policy, and the officials will not have a chance to interfere. He said the insurance regulator is simply following the central bank order issued early last month. He said small policy holders do not need to open accounts, but if they want to get the policy money from the insurance company, they must open bank account. According to the BB's directive, small life policy holders can open account against policy document. It is not mandatory for policy holders to keep minimum balance in those accounts. Welcoming the move, Sheikh Kabir Hossain, chairman of Bangladesh Insurance Association, said the association has been persuading the central bank for a long to make it mandatory for micro policy holders to maintain a bank account. He said giving policy holder's money back at maturity is "very tough" without bank account. Now it will be easy to pay back small policy holders' money. Besides, some unscrupulous people in the industry want to deceive small policy holders by not honouring the clients' claims. Mr. Hossain said the association wanted bank account at Tk 10 for small policy holders to encourage them as most them out of the banking system. A total of 14 life insurance companies are operating in the country in addition to the state-owned Jibon Bima Corporation. The government has, however, decided to accord new license for life insurance firms. IDRA also favours the government move, saying the insurance market can absorb more life insurers.