Non-life insurance companies would not give over 15% commission to agents from August 1 to comply with the regulatory instruction, Sheikh Kabir Hossain, President of Bangladesh Insurance Association (BIA) said yesterday.
Kabir was speaking at a press conference at Dhaka Club.
He warned that strict action would be taken if any company breaches the regulatory rules. If necessary, BIA would recommend the regulatory body to cancel the licenses of defaulting companies.
BIA president said non-life insurance companies became financially vulnerable due to various problems. The companies were not able to provide proper insurance services to their clients, he added.
“The ability to pay insurance claims is being lost day after day,” Kabir told the briefing.
The Insurance Development & Regulatory Authority (IDRA) and Bangladesh Insurance Association (BIA) jointly took some important steps in the last few months to overcome the situation, he added.
At the press conference, Karnaphuli Insurance Co Ltd vice-chairman Nasir Uddin Ahmed read out a written speech on behalf of the BIA President.
He said non-life insurance companies cannot appoint any staff on commission basis. Only licensed agents of IDRA were eligible to get the 15% commission, he added.
From August 1, no non-life insurance company could collect premiums from customers of other insurance companies’ by providing extra benefits, said Nasir Uddin.
“Insurance policies cannot be renewed before maturity,” Nasir added.
Sheik Kabir said the insurance sector had been suffering from an image crisis and the insurance companies would have to work together to brighten their images.
“We will not provide higher commissions any longer and stay alert so that everyone implements it,” he said.
Last Saturday, BIA organized a meeting at Dhaka Club to discuss the issue among themselves where CEOs and chairpersons of all non-life insurance companies were present.
On July 2 , IDRA issued several instructions to the insurance companies in order to bring discipline and transparency to this sector.
Green Delta Insurance Company Ltd managing director Farzana Chowdhury, Union Insurance Co. Ltd Chairman Muzaffar Hossain Paltu, were also present in the press conference.
Currently, 46 non-life insurance companies, including Sadharan Bima Corporation, a government-owned company, are operating in the country.