#Title

Fareast Islami Life Ins facing steep debt

Unable to clear claims for liquidity crunch
HOMELAND LIFE INSURANCE
OVER 37,000 CLIENTS
unsure about settlement of claims
PHOTO: PALASH KHAN
S DILIP ROY and SUKANTA HALDER
Firoza Begum, a resident of Shalmara village in Bhelabari union under Aditmari upazila of Lalmonirhat, opened a 12-year term policy with Fareast Islami Life Insurance Company some 15 years ago.
With the policy having matured about three years back, Firoza has regularly visited the company’s local office since then in a bid to get back her Tk 80,000 deposit.
“But I am not getting my money,” said the 52-year-old housekeeper.
Like Firoza, around 3,000 policyholders of Fareast Islami have been struggling to get claims amounting to around Tk 19.58 crore due to a liquidity crunch in the company, according to an official of the insurer.
“I am tired of going to the insurance company,” she added.
Rafiqul Islam, who works as a day labourer in Uttar Saptana village under Lalmonirhat sadar upazila, said his life insurance policy also matured three years ago but he is yet to get his funds back.
“I often visit the company’s office to get my Tk 40,000. I need the money as my wife is sick but I cannot afford the treatment,” he added.
On condition of anonymity, an official of Fareast Islami’s Lalmonirhat branch, said they have 21,000 policyholders in the district.
SUKANTA HALDER
More than 37,000 clients of Homeland Life Insurance Company Ltd are facing uncertainty about whether they would get back their insured amount owing to a lack of liquidity at the insurer caused by alleged irregularities, the regulator found.
The company is not settling claims involving Tk 79 crore, according to the Insurance Development and Regulatory Authority (Idra).
This prompted 6,820 policy-holders to lodge complaints with the regulator in the last one year as claims were not settled despite reaching maturity.
The insurance company has a life fund of about Tk 202 crore and it has invested Tk 112.23 crore of the sum in immovable and current assets.
Some Tk 81.77 crore has been invested in treasury bills and bonds and office space was bought in Cumilla at a cost of Tk 1.25 crore. Besides, land worth Tk 4.80 crore has been purchased in the Jallarpar area in Sylhet city, Idra documents showed.
A part of the remaining fund was spent to purchase cars, computers, furniture, and air conditioners.
But an Idra document questioned whether the company had actually invested the sum.
An investigation into an alleged misappropriation of a Tk 104 crore life fund is underway.
It came after Rahima Akhter, a policy-holder, filed a writ petition with the High Court against the company in March on behalf of 14 policy-holders for the alleged misappropriation.
The finance secretary, the chairman of the Idra, the chairman of the Anti-Corruption Commission, and the chairman and the vice-chairman of Homeland Insurance have been made respondents in the petition.
And based on the directive from the court, the Idra appointed an auditor to assess the financial health of Homeland Life Insurance, examine the complaint regarding the embezzlement, and sales of 120 kathas of land for Tk 48.60 crore in the Bashundhara Residential Area.
The Idra estimated that Tk 198 crore has been embezzled from the company, said an Idra official.
Recently, a group of directors of the company has written to the Idra about the fund mismanagement of Tk 104 crore from 1996 to 2009, an official of the Idra said.
Another group informed the regulator that about Tk 50 crore was mismanaged from 2010 to 2022, the official said.
At present, the company has 17 directors, including three independent directors.
The insurer had no long-term proper investment plan, resulting in the current situation confronting the insurer, said an Idra senior official.