Major rectification in insurance bills demanded
Sunday, 6 September 2009
FE Report
Shareholders in the insurance sector Saturday called for major rectification in the insurance bills to be passed in the next parliament session by opposing the stipulated categorization of shares and directors in insurance companies.
As there is no provision for categorization of shares in Central Depository Bangladesh Limited (CDBL) system, so there is no way for differing between sponsor and public shareholders or for electing two categories of directors- they told the reporters at a press conference in the city.
"Therefore, we call for enactment of the new insurance laws by keeping the provision of 'one category of shares' and 'one category of directors' alike the banking sector," Md. Abdul Awal, a representative from the shareholders said.
It has earlier been reported that two insurance bills -- the Insurance Act 2009 and the Insurance Regulatory Authority Act 2009 - are set to be passed in the next session of parliament which will be commenced from tomorrow (September 7).
Finance Minister AMA Muhith on July 9 placed the two bills before the Jatiyo Sangsad (JS) to pave the way for strengthening the regulatory process of the insurance sector.
Both the bills were later sent to the parliamentary standing committee on finance for scrutiny.
"The bill stipulated the provision of keeping six sponsor shareholders, six public shareholders and three neutral directors in the board of directors of the insurance companies," Awal said.
However, a proposal sent to the finance ministry by the Bangladesh Insurance Association (BIA) said that according to Securities and Exchange Commission (SEC) directives there will be 12 members from the sponsor shareholder group, six from the public shareholder group and two neutral directors in the board of directors, shareholders claimed.
"But, according to the SEC Corporate Governance Guidelines, there are provisions for minimum five and maximum 20 directors as well as 10 percent neutral directors in the board and there is no mentioning of sponsor shareholders or public shareholders", Awal added.
Referring to various earlier regulatory decisions taken by SEC and Bangladesh Bank, shareholders said that according to prior SEC recommendations, "There is no scope for maintaining such categorization of shares under the present central depository system and demat form".
The shareholders also demanded for legal actions against some leaders of Bangladesh Insurance Association (BIA) for "providing distorted information about the SEC corporate guideline".
Once passed, the Insurance Act will replace the Insurance Act 1938, and after the enactment of the Insurance Regulatory Authority Act, the Insurance Directorate under the commerce ministry will be dissolved.
Shareholders in the insurance sector Saturday called for major rectification in the insurance bills to be passed in the next parliament session by opposing the stipulated categorization of shares and directors in insurance companies.
As there is no provision for categorization of shares in Central Depository Bangladesh Limited (CDBL) system, so there is no way for differing between sponsor and public shareholders or for electing two categories of directors- they told the reporters at a press conference in the city.
"Therefore, we call for enactment of the new insurance laws by keeping the provision of 'one category of shares' and 'one category of directors' alike the banking sector," Md. Abdul Awal, a representative from the shareholders said.
It has earlier been reported that two insurance bills -- the Insurance Act 2009 and the Insurance Regulatory Authority Act 2009 - are set to be passed in the next session of parliament which will be commenced from tomorrow (September 7).
Finance Minister AMA Muhith on July 9 placed the two bills before the Jatiyo Sangsad (JS) to pave the way for strengthening the regulatory process of the insurance sector.
Both the bills were later sent to the parliamentary standing committee on finance for scrutiny.
"The bill stipulated the provision of keeping six sponsor shareholders, six public shareholders and three neutral directors in the board of directors of the insurance companies," Awal said.
However, a proposal sent to the finance ministry by the Bangladesh Insurance Association (BIA) said that according to Securities and Exchange Commission (SEC) directives there will be 12 members from the sponsor shareholder group, six from the public shareholder group and two neutral directors in the board of directors, shareholders claimed.
"But, according to the SEC Corporate Governance Guidelines, there are provisions for minimum five and maximum 20 directors as well as 10 percent neutral directors in the board and there is no mentioning of sponsor shareholders or public shareholders", Awal added.
Referring to various earlier regulatory decisions taken by SEC and Bangladesh Bank, shareholders said that according to prior SEC recommendations, "There is no scope for maintaining such categorization of shares under the present central depository system and demat form".
The shareholders also demanded for legal actions against some leaders of Bangladesh Insurance Association (BIA) for "providing distorted information about the SEC corporate guideline".
Once passed, the Insurance Act will replace the Insurance Act 1938, and after the enactment of the Insurance Regulatory Authority Act, the Insurance Directorate under the commerce ministry will be dissolved.