Developing non-life insurance sector
Ahmed Saifuddin Chowdhury :
Considering the present situation of non – life insurance industry in Bangladesh, I think, though it is my personal opinion, that some rules & regulations need to be reviewed for the greater interest of the industry.
At present the non-life insurance sector of Bangladesh is not successfully playing its role for remarkable growth in the national economy, which I think is alarming for future development of non-life insurance sector.
Here I am expressing some limitations working against the development of non – life insurance:
l Giving of additional pay back over the prescribed commission.
l Comparing to overseas market our insurance premium rate is too high.
l Considering non-life insurance sector, basically the agent for procurement of business is not needed and it should be withdrawn and allow these expenses for recruiting Marketing Executives for procurement of Business.
l There are limitations of non-life insurance product.
l For expansion of non-life insurance sector, there is vast opportunity to find out the logical insurance market and those markets should be made mandatory.
l For extending the scope of Insurance Market it shall be required to review some rules and regulations of non-life insurance sector.
In my point of view, some solutions in respect of limitations are presented below:
l In case of government business, my opinion is this that the government owned Sadharan Bima Corporation shall underwrite 100 per cent of that business.
l 50 per cent government business presently distributed among the non-government non-life insurance companies at an equal rate should be withdrawn for betterment of the non-life insurance sector.
l To create discipline and transparency in non-life insurance market we should consider non-tariff market in Bangladesh and I think, it would expedite increase in total insurance premium of non-life insurance sector.
lIn respect of present law of re-insurance, 50 per cent of re-insurance business should be ceded to Sadharan Bima Corporation.
In my opinion it should be changed to 30 per cent mandatory to Sadharan Bima Corporation and remaining 70 per cent be allowed in the overseas market.
However, in case of 70 per cent Re-insurance, there shall be option for non-life insurance companies to re-insure with Sadharan Bima Corporation or with Foreign Re-insurer.
l In case of introducing new non-life insurance product, the original insurance company be allowed to market first under intimation to the insurance authority and if it is successful then going to take proper approval from the Insurance Authority.
Here trail period should be prescribed.
l Actually grading of non-life insurance company’s performance should be based on the ability of prompt settlement of claims.
This requires some changes regarding submission of claim information, papers and documents. That is needed to be made easier for faster settlement of claims.
l Present law states that the collection of premium should be deposited into company’s account on date or on the following day.
In this respect my opinion is to consider 1 (One) month for depositing premium into company’s account instead of on date or following day.
If an insurance company fails to deposit premium into company’s account within 1 (One) month then Insurance Development and Regulatory Authority (IDRA) may impose per day penalty at a considerable rate for delay.
In conclusion, I feel that by considering my above opinion we will be able to make healthy non-life insurance sector by reviewing some of the rules and regulations of non-life insurance sector.
This will enhance insured’s confidence and interest for taking proper insurance coverage for their own interest, as well as the growth of non-life insurance sector tremendously improve and non-life insurance premium volume will also be remarkably increased, that will play a great role in national economy.
(Mr. Saifuddin Chowdhury is the Chief Executive Officer, Bangladesh General Insurance Co. Ltd).
