Passage of bills to bolster insurance sector in next JS session

The Insurance Bill 2009 and the Insurance Regulatory Authority Bill 2009 will be passed in the next session of parliament, said a competent source.

"There are 11 bills pending and out of them these two have already been scrutinised by the standing committee on finance which has placed its report before the House," the source in the parliament said.

The next session will begin on January 4 and on the inaugural day, President Zillur Rahman will deliver his speech.

Finance Minister AMA Muhith on July 9 last placed the two bills before the Jatiyo Sangsad (JS) to pave the way for strengthening the regulatory process ofthe insurance sector.

A total of 62 insurance companies are operating in the country and they need to be regulated under comprehensive laws and guidelines and supervised by a strong regulatory authority, said chairman of the standing committee AHM Mostafa Kamalrecently.

The insurance companies earned Tk 42.5 billion (4,250 crore) in premiums last year (2008) and there is ample scope to expand the business manifold.

The Insurance Bill 2009 has proposed that the paid-up capital for a life insurance company will be Tk 300 million from Tk 75 million and for non-life insurance Tk 400 million from Tk 150 million.

The Insurance Regulatory Authority will consist of a chairman and four members and they will look after the whole sector.

Premiums charged by the companies will be determined by a committee formed by the authorities and it will also investigate any wrongdoings of the companies, the bill says.

If there is any dispute between clients and companies, they can come to the authorities for settlement and interest of the clients will be protected in a transparent manner, it adds.

The proposed Insurance Bill 2009 says that the sector needs to be managed properly and be strengthened by reducing business risks, and local and international insurance laws need to be harmonised considering the socio-economic aspects of the country.

The Insurance Regulatory Authority Bill 2009 says there is an increasing need to regulate one of the largest sectors in the country, harmonise local and international insurance laws considering the socio-economic aspects of the country, and protect the interest of policy-holders and other related beneficiaries.

The insurance bill has proposed that insurance companies should be categorised as 'life' and 'non-life' instead of 'life' and 'general.'

The new Insurance Act will replace the Insurance Act 1938, and after the enactment of the Insurance Regulatory Authority Act, the Insurance Directorate under the finance ministry will be dissolved.