Insurance law amendment: IDRA seeks stronger oversight, consumer protection fund

The amendment to Bangladesh's insurance law is facing delays as the Bangladesh Insurance Association (BIA), the representative body of company owners, has yet to submit its feedback, according to the Insurance Development and Regulatory Authority (IDRA). 

The regulator has warned that the delay is affecting efforts to safeguard customers' interests and maintain public confidence in the financial sector.

Insurance law amendment stalled as no feedbacks yet from company owners

Key proposals in the insurance law amendment include:

• IDRA will have expanded powers to transfer shares, assets, and liabilities of insurance companies to third parties and, if necessary, liquidate companies.
• Authority to remove or replace chairmen, directors, CEOs, key management personnel, or any employees of insurance companies.
• Ensuring stability of the financial system, including payment, settlement, and liquidation processes of insurance companies.
• Protection of customers' interests and continuation of critical insurance operations.
• Prevention of unnecessary government fund losses and preservation of insurance companies' asset values.

Navigating the trust deficit in our insurance industry

• Minimisation of creditors' losses and maintenance of public confidence in the financial system.
• Applicability to Islamic insurance companies, with separate regulations to be formulated by IDRA.
• Increasing companies' capital through current shareholders or new investors.
• Formation of one or more "bridge insurance companies" to facilitate the sale of troubled companies or their shares.
• Provisions for temporary government ownership of insurance companies if necessary.
• Establishment of a consumer protection fund and arrangements for compensation to shareholders and creditors.
• Formation of a council to manage institutional, natural, or other emergencies in the insurance sector.
• Procedures for the liquidation of insurance companies under specified circumstances to settle liabilities.