Two general ins cos face music - Share market analysis of dhaka stock exchange, Bangladesh

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18 September, 2012 10:12 AM Source: The Financial Express Bangladesh

Insurance regulator suspended opening new policies and renewal of old policies of two general insurance companies Sunday until further directive for violating commission directive.

The two non-life insurance companies are Northern General Insurance Company Limited and Islami Insurance Company Bangladesh Limited.

Insurance Development and Regulatory Authority (IDRA) also fined Md. Rabiul Awal, Bangshal branch manager of Islami Insurance Company Limited Tk 50000 individually along with suspension.

The regulator suspended operation of Paltan Branch of Northern General Insurance Company and its manager after a hearing held Sunday at its office in the city.

IDRA Chairman M. Shefaque Ahmed, Actuary, its members Naba Gopal Banik, Sayeed Ahmed Khan, Md. Nurul Islam Mollah, Md Fazlul Karim and officials from the two companies were present at the hearing.

IDRA sources said a vigilance team of insurance watchdog visited Paltan and Ramna branches of the two insurance companies on 25 and 19 June last and checked their money receipts and bank statements.

The insurance watchdog found the company doing business unpaid which is a flagrant breach of IDRA rules and regulations.

The investigation team of the regulatory authority also found that the company paid agent commission more than 15 per cent-the maximum lawful limit for agent-commission.

The company has been fined under Kha sub-section of section 130 and section 134 of Insurance Act 2010. The suspension would remain effective until further order.

Contacted, Deputy Managing Director of Islami Insurance Bangladesh Limited Shamsul Huda admitted the IDRA decision.

He said they are holding a meeting today (Tuesday) with insurance regulator to resolve the matter.

An IDRA member said they would be tougher on the violation in paying agent-commission in the coming days to restore healthy environment in the insurance sector.

IDRA also warned the non-life insurance company of stern action for such violation in future.

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