The Insurance Development and Regulatory Authority (IDRA) has mandated four life insurance entities, including Progressive Life Insurance Company Limited, BAIRA Life Insurance Company Limited, Swadesh Islami Life Insurance Company Limited, and Golden Life Insurance Limited, to halt expenditures from their premium incomes and investments until all policyholder claims are resolved by the close of December.
In a series of communications between December 6 and 20, IDRA conveyed its growing concerns, emphasizing the insufficient progress made by these companies in settling policyholder claims. An official from IDRA informed The Daily Star that a predominant challenge has been the companies’ reluctance to address these claims, further exacerbated by a liquidity crisis they are facing.
Progressive Life’s record revealed a mere settlement of 1.33% of claims, amounting to Tk 2.25 crore against a whopping Tk 170 crore. Such dismal figures prompted IDRA to impose specific restrictions, limiting commission payments to agents and emphasizing timely documentation and claim settlement, in adherence to insurance regulations.
Similarly, Golden Life Insurance, BAIRA Life Insurance, and Swadesh Islami Life Insurance showcased varying degrees of claim settlement inefficiencies, as detailed by their respective third-quarter 2023 records. These findings prompted IDRA’s stern directives to ensure that all claims are settled promptly, underscoring the urgency of the situation.
Responding to queries, Amzad Hossain Khan Chowdhury, CEO of Golden Life Insurance, cited previous mismanagement challenges, resulting in reduced policy openings and consequent cash flow constraints, making immediate claim settlements challenging. However, SM Masudul Haque from IDRA emphasized the December 31 deadline for claim settlements, indicating potential regulatory actions should these directives remain unheeded.
Financial experts, including AB Mirza Azizul Islam and Md Main Uddin from the University of Dhaka, echoed concerns over governance issues within the insurance sector. They stressed the imperative need for strict adherence to regulatory guidelines and potential punitive measures if companies fail to address these pressing challenges.
