Thrust on Ins sector\\\'s role in easing risks for banking

Bangladesh Bank (BB) Deputy Governor S K Sur Chowdhury emphasized Wednesday the role of the insurance sector in mitigating risks and ensuring higher safety for the banking business, as new financial crisis and challenges are emerging worldwide.
"Though, these are new in Bangladesh, insurance companies across the world are offering new and innovative products to encounter the emerging financial crisis and challenges," he said while inaugurating a seminar.
Prime Insurance Company Limited (PICL) organised the seminar on 'Banking Business Protection and Insurance' at a city hotel.
He said the insurance sector in Bangladesh has a long history of evolution, and at present the insurance companies have vast prosperity of business expansion.
After introduction of BASEL-III, the banks have to insure Bankers Blanket Bond Policy (BBB Policy) that provides protection against direct financial loss caused by various financial crimes, which are not covered now, he added.
The seminar started with the welcome speech of PICL advisor Md. Ezhar Hossain, while managing director Mohammodi Khanam focused on importance of the programme in her speech.
S K Sur Chowdhury and noted actor Ilias Kanchan launched the PICL-published Traffic Guide Book (second edition) on this occasion.
The Financial Express (FE) and Ekattor TV were the media partners of the programme.
Three papers were presented in the seminar. Simon Hogg, international broker of the UK-based Tysers was the keynote speaker of the seminar on 'Bankers Blanket Bond Policy'. Executive director of India-based J B Boda Reinsurance Brokers Pvt. Ltd Chandrakant R. Vaidya presented paper on 'Professional Indemnity and Computer Crime'. Besides, general manager of General Insurance Corporation of India Parijat Dutta presented paper on 'Directors & Officers Liability Insurance'.
Chairman of Financial Excellence Ltd. Abu Naser Bukhtear Ahmed, head of legal & compliance of Standard Chartered Bank Chowdhury MAQ Sarwar, and director general of Bangladesh Institute of Bank Management Dr. Toufic Ahmed Chowdhury moderated the three sessions respectively.  
Simon Hogg said the BBB Policy will cover insurance losses from employee infidelity, physical loss of property on premises and in transit, forgery and alteration of monetary instruments and other documents of value and computer, and cyber fraud as well as fraudulent electronic transfer.
He said all these risks are modern-day risks, and the banks must be ready to mitigate these.
"Crime is a reality, and criminals ignore laws. So we have to prepare for that."
He said every financial institution is exposed to the risk of criminal activities, both from within the organisation and from outside. Losses can have a devastating impact on a financial institution's annual report.
"Insurance offers financial institutions high-level protection against the effects of potentially catastrophic criminal loss, specifically for the risks of employee dishonesty, forgery, cyber liability and computer crime," he added.
Chandrakant R. Vaidya in his paper mentioned that professional indemnity insurance provides protection against legal liability to third parties.
"These liabilities can result from the negligent acts, errors or omissions, committed by an organisation's officers or employees."
He said computer crime insurance covers loss, arising from fraudulent input, modification or destruction of electronic data in the bank's computer system, electronic fund transfer system or customer communication system.
PICL chairman Ferdous Amin said it is very important for the financial institutions to take the proper risk management strategy through insurance policies to safeguard their property under the insurance coverage. At the same time it is the duty of the banks to protect depositors' money and bank properties.
"Insurance coverage under the policies will cover any forgery or fraudulency by employees/third parties, cyber crime, professional indemnity of the bankers and directors, and employers' liability."
"All insurance coverage will come under one umbrella. Banks need not take coverage separately for cash-in-transit, cash-in-counter, cash-in-safe, and cash-in-locker policy etc," he further said.
PICL MD Mohammodi Khanam said Prime Insurance Company Limited has made its foot prints in the insurance industry to provide economic guarantee to the people of Bangladesh.
PICL will be taking the risks on behalf of its clients to provide them safety and security. The company is the pioneer in launching many new products, such as - Shipbuilders Liability Coverage, Hajj & Umrah Policy and Health Plan Insurance Coverage, she added.  

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