Parliament expected to pass insurance bills

The winter session of parliament that begins today is expected to pass two insurance-related bills, aiming to streamline the insurance business.

The two bills are The Insurance Act 2009 and The Insurance Regulatory Authority Act 2009.

“These two bills will be passed in the coming session,” Finance Minister AMA Muhith told reporters after a meeting with the Bangladesh Insurance Association (BIA) representatives at his ministry's conference room on Sunday.

BIA Chairman Rafiqul AKM Islam led the BIA delegation.

Muhith would pilot the two bills in parliament.

On July 9, the minister had placed the Insurance Bill 2009 and the Insurance Regulatory Authority Bill 2009 in parliament to pave the way for strengthening the regulatory process of the insurance sector.

After scrutiny, the standing committee submitted the bills to parliament in September.

However, the minister had some disagreements with the standing committee over a few clauses of the bills, but eventually the committee ignored his suggestions.

Sources said the minister proposed that there should not be any restriction on the appointment of the chief of the insurance regulatory authority arguing that the appointment of a person to the highest position should be open.

The minister had also suggested that the number of directors of an insurance company be limited to 15. He also felt that a director of an insurance company should not be a member of the board of any bank or any other insurance company.

The Insurance Bill 2009 says the paid-up capital for a life insurance company will be Tk 30 crore from the existing Tk 7.5 crore and for a general insurance Tk 40 crore from the existing Tk 15 crore.

A total of 62 insurers are operating in the country and earned Tk 425 crore in premium last year.

The proposed Insurance Act 2009 says the sector needs to be managed properly and be strengthened by reducing business risks, while local and international insurance laws need to be harmonised considering the country's socioeconomic aspects.

The Insurance Regulatory Authority Act 2009 says that there is an increasing need to regulate one of the largest sectors in the country, harmonise local and international insurance laws considering the socioeconomic aspects of the country, and protect the interests of policyholders and other related beneficiaries.

The insurance act proposes that insurance companies to be categorised as 'life' and 'non-life' instead of 'life' and 'general'.