The Insurance Development and Regulatory Authority (IDRA) has imposed a fine of Tk5 lakh on the Union Insurance for violating the Chief Executive Officer’s appointment rules.
The decision came at a hearing IDRA held at its headquarters on April 1 with the board members of the company.
IDRA Chairman M Shefaq Ahmed presided over the hearing while Union Insurance Chairman Muzaffar Hossain Paltu was present, among others, said a press release IDRA issued yesterday.
The Union Insurance CEO post remained vacant over the last two years which is a violation of Insurance Act 2010, said the press release.
The company did not take any measure to appoint CEO despite IDRA’s instructions three times. Even the board of the insurance company did not respond to the authority’s letter served.
According to the insurance companies act, the post of CEO cannot remain vacant for more than three months. However, IDRA has the authority to extend the period by three more months.
The release said the appointment of a CEO is a very vital issue for an insurance company to protect shareholders’ interest. The company, however, appeared to have shown negligence and delayed in case of appointing CEO.
From this perspective, IDRA imposed fine on the company, added the press release.
The country’s insurance sector is facing an acute shortage of Chief Executive Officers as the industry seriously lacks efficient manpower for the top positions, said sources in IDRA.
Currently, some 20 insurance companies are running without CEOs for the last eight months to one-year period that goes beyond the rules.