Reforms yet to touch Insurance sector
Gazi Anowar :
Bangladesh’s insurance sector is currently facing significant challenges, including widespread corruption, mismanagement, and a lack of effective regulatory oversight.
Despite governmental efforts to reform various industries, the insurance sector remains largely unaffected, leading to growing concerns among stakeholders.
Over the past decade, the sector has been exploited by individuals with political backing, resulting in its current state of disarray.
Despite the fall of the previous government six months ago, the insurance industry remains mired in corruption, with little sign of the promised reforms.
Many established insurance companies have become hotbeds of irregularities, including embezzlement of funds under the guise of fixed deposits, customer harassment, and delays in claim settlements.
The regulatory body, Insurance Development and Regulatory Authority (IDRA), has been criticized for its inaction, with some officials allegedly complicit in these malpractices.
Despite the government’s fall due to corruption-related issues on August 5, these officials remain in their positions.
Policyholders are bearing the brunt of these issues, with thousands awaiting claim settlements long after their policies have matured.
Frustrated by the lack of response from local offices, many have turned to company headquarters and IDRA, only to find their grievances unaddressed.
Some have been waiting for their claims for over a decade, leading to widespread disillusionment.
According to IDRA, out of 36 life insurance companies, 31 have unresolved claims totaling approximately BDT 36.43 billion from nearly 1.1 million policyholders.
The likelihood of these customers receiving their due payments remains uncertain.
Between 2020 and 2023, the claim settlement rate has declined from 85% to 72%, indicating a worsening situation.
Companies such as Fareast Islami Life Insurance, Padma Islami Life Insurance, Progressive Life Insurance, Sunflower Life Insurance, Baira Life Insurance, and Swadesh Islami Life Insurance have been identified as major offenders.
Non-life insurance companies are also facing numerous allegations of misconduct.
Insurance expert and former director of the Bangladesh Insurance Academy, Kazi Mohammad Murtaza Ali, emphasized the need for immediate reforms.
He suggested that the government should consult stakeholders to amend existing laws and focus on timely claim settlements to restore public trust.
Insiders within the insurance sector hold IDRA responsible for the prevailing corruption, alleging that certain officials facilitate these irregularities in exchange for financial benefits.
Current IDRA Chairman M. Aslam Alam has also faced criticism for his lack of engagement with Chief Executive Officers of insurance companies, further exacerbating the industry’s challenges.
Despite the government’s efforts to reform various sectors, the insurance industry remains untouched by these changes, leaving policyholders in a state of uncertainty and distress. The absence of effective oversight and accountability continues to hinder the sector’s progress and erode public confidence.
In light of these challenges, experts advocate for comprehensive reforms, including strengthening regulatory frameworks, enhancing transparency, and ensuring timely claim settlements. They stress that restoring public trust is crucial for the sustainable development of Bangladesh’s insurance sector.