Finance Minister AMA Muhith came down heavily on the country’s insurance sector yesterday due to what he said huge corruption and worst performance of the sector
“Insurance company means it is a field of plundering as the sector of 76 companies expanded hugely in last few years,” he told journalists, after holding a meeting with chairmen and managing directors of state-owned banks, insurance companies and financial institutions.
The minister said there had been no control over the insurance companies and now the Insurance Development and Regulatory Authority (IDRA) wants to control the companies, but it has been alleged some of them put up obstruction against the regulator.
“We have found a total of 50 cases of violation of regulation and creating obstruction.”
Muhith termed the insurance companies wicked as they are doing wrong things against IDRA activities and warned the officials and owners of the companies to be gentle and rational as well as stopping plundering. “Else, we’ll resist it with iron hand.”
Most of the insurance companies in the country have a tendency not to meet clients’ claims and many have to face even harassment in getting due payments as the clients filed complaints with the regulatory authorities.
The companies allegedly do not inform IDRA about claim settlements after submission by clients, flouting a recent directive.
On March 24, IDRA issued a letter directing all companies to inform the regulator about claims within two days of submission by the policyholders, shareholders or stakeholders. Besides, companies are also bound to inform the authority about monthly reviews on initiatives taken against the claims.
But no company had complied with the directive so far, except the foreign insurance giant, Metlife Alico.
Recently on January 13, IDRA further warned the insurance companies to settle quickly the claims tabled after being affected by political violence.
The authorities issued the order in the back drop of complains that the companies were making unnecessary delays in settling the claims – which is being considered as a trick only to discourage the clients to submit the claims.
IDRA also not capable enough to monitor the insurance sector as it suffered for efficient manpower. The authorities did not get approval of organogram as a result it fell in extreme manpower crisis.
The whole sector having 78 companies is being managed by only 48 officials. In this circumstance, IDRA halted its inspection activities.