A section of insurance companies are appointing their respective Chief Executive Officers (CEOs) grossly violating the existing recruitment rules.
Insurance Development and Regulatory Authority (IDRA) has recently detected some irregularities in the appointment of the CEOs in insurance sector.
The country’s most of the insurance companies were found in a tendency to appoint managing directors even before getting approval from IDRA.
Against such a backdrop, the insurance regulatory body (IDRA) has asked all insurance companies to strictly comply with the existing CEO appointment and removal rules.
The authority in a circular issued yesterday said: “Anybody cannot receive salaries and allowances as CEOs before getting formal approval or renewal by IDRA.”
Any person is not allowed to serve the insurance company as CEO or receive salaries and allowances before getting approval from Insurance Development and Regulatory Authority (IDRA), according to the insurance act 2010.
The circular also instructed the insurance companies to use the CEO designation, instead of Managing Director, as the authority gives approval to the CEO position only.
The instruction came up following complications raised due to the refusal of some appointments of the CEOs, who already got salaries from the companies before getting IDRA approval.
According to the circular, the board of directors of most of the companies had appointed the CEOs immediately after a decision to fill up the position. As a result, the high ranking officers start doing their jobs and getting salaries even before getting approval from IDRA.
But complications emerge when the CEOs fail to get NOC (no objection certificate) from the regulatory body due to non-compliance with the requirements. Under these circumstances, a company has to ask the appointed employee to give back the money earlier given as salary, said the circular.
Progressive Life Insurance suffered such complications as the IDRA recently rejected appointment of the company CEO.
The company appointed Abul Bashar Akond as CEO in October last year without getting any prior approval from IDRA.
Abul Bashar Akond, who had earlier served the NRB Global Insurance, holding the same position, failed to submit the required documents to the authority.
As a result, IDRA rejected his appointment in December last year. In this perspective, the company asked the CEO to pay back the money that he received as salaries and allowances within three months.
IDRA also decided to cancel the re-appointment of Sunflower Life Insurance CEO Zakir Hosain and Fareast Islami Life Insurance CEO Hemayet Ullah for not following the proper procedures in appointing them as CEOs.
