Delta Life fined Tk20 lakh for flouting insurance law
The Insurance Development and Regulatory Authority (Idra) has slapped Delta Life Insurance Company with Tk20 lakh in fines for violating insurance law over the 2015-2017 period.
The regulator, following its hearing on 25 January, concluded that the life insurer's violation of insurance law had been proven in nine of the 26 audit objections from special auditor Howladar Yunus and Company.
And, on February 12, the company was ordered to pay the fine within 15 days.
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The violations
According to the auditor and the regulator, the company over the 2015-17 period overstated its premium income by Tk72 crore through showing insurance premium received after 31 December of the particular year. And it allowed the company to spend more against the inflated income. Also, the company's revenue account and balance sheet were faulty.
Tk3 lakh has been fined for the violation as the company's explanation was not satisfactory.
Tk2 lakh has been fined for paying commission to agents without ensuring their agent licence from the regulator.
Another Tk1 lakh fine was imposed for paying some agent commission in cash.
As audit objections regarding the company's car usage and maintenance were not settled, the regulator slapped it with another Tk1 lakh fine.
The company spent Tk7.56 lakh as travel allowances to a director, Zeyad Rahman, and a banker, Sayeed Ahmed, for attending international training and seminar, which the regulator said was illegal and asked the company to take the amount back from them in 30 days.
Due to spending more than the allowable limit to buy a sport utility vehicle for its brokerage subsidiary Delta Life Insurance will count Tk3 lakh in fines and the company also has been ordered to sell the car in three months to invest the proceeds in profitable sectors.
Tk2 lakh fine was imposed for understating 2016 life revenue account by Tk80 lakh.
The company saw Tk4 lakh fine imposed for understating insurance claims by Tk2.4 crore in financial statements through not maintaining policy and claims register which are mandatory.
Also, due to understating liabilities through not disclosing the amounts of unpaid claims over the audited years, the insurance regulator slapped the first private sector life insurer of the country with another Tk3 lakh fine.
Delta Life Director Zeyad Rahman told The Business Standard, "The board will examine the contents of the Idra letter and decide on the next course of action."
