Ahammad Parvej Khan
Country's Insurance industry is hoped to multiply its contribution to the GDP soon as several initiatives is planed while some measures are already underway including settling down commission issue, re-insurance in private sector, modernizing insurance academy etc.
Sheikh Kabir Hossain, President, Bangladesh Insurance Association (BIA) told Bangladesh Post that once there was an unhealthy competition in the insurance sector, in terms of business, commission etc. for a long period of time.
"We tried several times to stop this but failed, it was a failure of us or we can say that there was the lack of cooperation and coordination among us. This time we all together, under the leadership or cooperation with the regulatory body, Insurance Development and Regulatory Authority (IDRA), have come to concrete decision in regard to the insurance commission of 15 percent including the government's VAT and Tax. The decision was taken with joint effort of the top executives of Insurance companies and IDRA", said the BIA President.
Sources said IDRA has already issued several circulars for the companies for strict implement of the decision.
BIA sources said that to materialize the decision effectively and strictly, they will provide allout support to the regulatory body.
IDRA has already formed a monitoring committee to go for punitive measures in terms of violations to the rules regarding commission. It was named as 'surveillance' committee where they kept representation of BIA but BIA requested IDRA to avoid its representation in this regard so that the question of any conflict of interest may not rise.
Sheikh Kabir mentioned that challenge is that earlier they were not able to decide about the percentage of commission because companies did it according to their will due to having no executive order from the regulatory authority.
"Recently we have come to another understanding that we will no more practice of strategically snatching away ones business by another one. BIA will also keep it in sharp monitoring. If anyone lodge complaints in this connection we try to settle the dispute through investigation and discussion", he added.
Finance Minister AHM Mustafa Kamal recently said 'Sadharan Bima Corporation' is providing insurance coverage to the ongoing mega projects of the country as a result the organisation will be able to deposit more revenue to the government exchequer.
Minister made the comment while briefing newsmen after the handing over ceremony of Tk 50 crore check of the Shadharan Bima, as dividend to the government exchequer.
Minister said 'Sadharan Bima Corporation' is providing Insurance and Re-Insurance services at a time also paying dividend to the government exchequer every year.
Finance Minister also sat with BIA, IDRA and other relevant stakeholders of the sector recently to discuss how to develop the sector.
Minister said no re-insurance to go outside the country. BIA also was requesting the authority from long back in this regard so that any re-insurance may not go out of the country, this should be here in the country.
"It is said that we have no strength of maintaining re-insurance, but we don’t believe it. Out 'General Insurance Company' the government sector non-life and only re-insurance company now doing this and it has all the capacity to meet our demands, because they have their re-insurance agreement with some international companies", Kabir added.
BIA will mak a demand to approve a Re-Insurance company from private ownership, because then there will be competition. It may be more than one in number if the government approve. BIA also wish to withdraw the third party insurance of the motorized vehicles, because it has no visible coverage that can create any benefit for the government.
BIA emphasize setting up effective Insurance Academy for developing skilled human resources on the perspective of that the existing Insurance Academy is not working effectively.
BIA expressed its worry over some NGOs engagement in providing re-insurance coverage illegally.
"I think it should be stopped as soon as possible. We raised this issue also to Finance Minister and he has assured us of taking measures soon in this regard. It may be that there have something in their laws in regard to provide insurance coverage, what we have to look into", said a BIA leader.
Insurance sector contributes .05 percent in the country's GDP. But now it is believed that this contribution will be multiplied within a very short span of time if all the measures, underway, are implemented effectively and timely.