SUKANTA HALDER

The Insurance Development and Regulatory Authority (Idra) has declared fines amounting to Tk 37 lakh on six insurance companies for breaching rules.

Through these penalties, the watchdog of Bangladesh’s insurance industry aims to encourage better regulatory compliance and transparency among local insurers.

The companies being fined are Guardian Life Insurance, National Life Insurance, Alpha Islami Life Insurance, Provati Insurance, Rupali Insurance, and Continental Insurance.

Provati Insurance is facing the highest fine of Tk 10 lakh, while Alpha Islami Life will pay the second-largest amount of Tk 7 lakh. Meanwhile, the other four will pay Tk 5 lakh each.

The Idra has imposed these fines as the companies committed several regulatory violations, such as failing to appoint a chief executive officer, provide withholding agent details, ensure accurate policy information, and breaching tariff rates.

Guardian Life was fined for violating the Insurance Act 2010 by not appointing a chief executive officer since January 2021.

The company has also been instructed to fill the position within the next 60 days.

Regarding National Life, the Idra is fining the company for failing to submit details on 43,161 of its roughly 1.37 lakh withholding agents to the Insurance Information Management System (IIMS).

Alpha Islami Life had settled 46 death claims in 2022, paying out about Tk 56 lakh to this end, according to the company’s record books.

However, the insurer’s annual financial report for that year quoted the value paid for death claims at Tk 27 lakh. So, considering the Tk 28 lakh discrepancy, the Idra has fined the insurer for submitting false or inaccurate financial data.

Besides, a detailed review revealed that Alpha Islami Life paid a total of Tk 3.29 crore as surrender claims against 106 policies issued in 2021 and 67 policies in 2022.

But the surrender value for these terminated schemes was paid in breach of the Insurance Act, which says life insurance policies must remain in force for at least two years to qualify for this benefit.

The regulator informed that Provati Insurance has been fined for violating the insurance tariff rates and failing to provide information to the IIMS as required.

And like Guardian Life, Rupali Insurance was fined for failing to appoint a chief executive officer since January 2023. Also, the company has been instructed to fill the vacancy within the next 60 days.

Similarly, Continental Insurance was fined for not appointing a chief executive officer since July 2024.

HOW THE INSURERS SEE IT

In a statement, Guardian Life said they have not received any letter from the Idra regarding the fine for breaching rules.

“But if the fact remains the same, we will submit a review application or petition to the Idra,” it added.

The company further said that the process of appointing a chief executive officer as prescribed by the regulator is taking longer than normal due to a lack of qualified candidates.

Nura Alam Siddikie Ovee, the chief executive officer of Alpha Islami Life, said the company is at times compelled to allow a policyholder to terminate their schemes outside legal provisions.

“When influential people express their desire to surrender a policy, we are sometimes compelled to do so even if it goes against the company’s best interests and goodwill,” he added.

But despite basically admitting that the company has indeed broken the associated rules, Ovee said they will appeal the Idra’s decision to impose a penalty.

Regarding the discrepancy in the value of death claims reported in their annual report against company books, he said the fault lies in mathematical errors.

“The issue has been reported to the regulator,” Ovee added.

Ataur Rahman, company secretary of Continental Insurance, said they recently asked the Idra to give time until March to appoint a permanent chief executive officer.

He also informed that they have already selected an individual for the role, and will send the required documents to the Idra for its approval.

Officials of National Life, Provati Insurance and Rupali Insurance could not be reached to comment on the matter by the time this report was filed.

Attempts were also made to contact M Aslam Alam, chairman of the Idra, but he too could not be reached.