Bancassurance gets govt nod

The Financial Institutions Division (FID) of the Finance Ministry on Tuesday okayed the plan to introduce bancassurance—selling insurance products through bank branches--in the country.

The FID allowed and instructed the Bangladesh Bank to publish a gazette for its "Bancassurance Guideline" for scheduled banks based on which they would operate as insurance agents.

Also the Insurance Development and Regulatory Authority has been instructed to issue the "Corporate Agent (Bancassurance) Directives" to let the country's life and non-life insurance companies make banks their selling agents.

According to the drafts an insurer can partner with three banks and also a bank can sell the products of three insurance companies.

Banks must meet some financial strength criteria to work as a corporate sales agent of insurers.

Bancassurance is a popular distribution channel for the insurance industry across the world and Bangladesh has taken more than a decade to pave the way for it.

Around four lakh individual life insurance agents are working across the country while some two thousand non-life insurance agents are hunting businesses for their partner companies.

Insurance agents' association had been protesting against the plan to introduce bancassurance citing the upcoming competition.

Industry people, the government and the regulator, however, were for a change and modernisation of the country's underdeveloped insurance industry.