Crisis-ridden Sonali Life Insurance gets observer

The Financial Institutions Division (FID) has appointed its additional secretary Md Shah Alam as an observer to the crisis-ridden Sonali Life Insurance Company to protect the interest of policyholders and address other issues.

Besides, it instructed the Insurance Development and Regulatory Authority (IDRA) to appoint two independent directors to the board of directors subject to withdrawal of all writ petitions filed by the company.

One of the directors will act as the chairman of the interim board. The IDRA will take necessary steps to assign responsibilities of the board, according to an order issued by the FID.

The observer will monitor the company activities, including providing company updates to the FID secretary.

An audit firm appointed by IDRA will prepare an audit report and submit it to the board of IDRA.

As soon as possible, the interim board will take the necessary actions to form a regular board of directors in accordance with the regulations and transfer responsibility to the newly formed board.

After the change in government, a good number of officials of the insurance company recently staged a protest, accusing the chairman of the insurance regulator of corruption and demanding his resignation.

The protesters also demanded removal of the administrator appointed by the regulator at the premises of IDRA.

In July last, the IDRA appointed Hoda Vasi Chowdhury & Co to conduct a comprehensive audit on the allegations of corruption and irregularities at Sonali Life Insurance.

On July 25, the Anti-Corruption Commission (ACC) filed a case against eight individuals, including Sonali life's former Chairman Mostafa Golam Quddus, his six family members, and a relative, over allegations of embezzlement of the company's funds.

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