This act is replacing the Insurance Corporation Act formulated in 1973
The incumbent cabinet held its last weekly meeting with Prime Minister Sheikh Hasina in the chair, and approved the Insurance Corporation Act, 2018 along with several other laws in the meeting on December 3.
This act is replacing The Insurance Corporation Act formulated in 1973.
However, the Awami League-led government in 2009 modernized The Insurance Act formulated in 1938, and had named it Bima Act 2010. The government also formulated Insurance Development and Regulatory Authority Act, 2010 to properly regulate this sector.
The newly formulated Insurance Corporation Act, 2018 is comprised of the provisions from both the Bima Act 2010 and the Insurance Development and Regulatory Authority Act, 2010. It was also translated to English for better accessibility.
According to sources from the Banking and Financial Institution Division, which is a part of Finance Ministry, the cabinet approved in principal the draft insurance corporation act on November 9, 2018. The draft act had 33 provisions.
One of the most important changes made in the new act is the removal the provisions 3, 14, 14a, 24, 27 and 32, which were present in the Insurance Corporation Act, 1973.
The authorized and paid-up capital of Jiban Bima Corporation was previously set at Tk20 crore in 1973, which was increased to Tk300 crore and TK30 crore respectively. Similarly, the authorized and paid-up capital of Sadharan Bima Corporation has been increased to Tk500 crore and Tk100 crore respectively.
The number of members in the board of directors for Jiban Bima and Sadharan Bima corporations has been increased from seven to ten people. The new law also states that at least five people must be present at a board of directors meeting.
The provisions regarding eligibility and professionalism of board of directors have also been updated. The provisions on insurance of government property have also been updated, with notable changes in the provision 16(1).
Responding to a query, Cabinet Secretary Md Shafiul Alam said: “The newly formulated act has been updated to keep up with the modern times. The insurance sector is one of the most important sectors in Bangladesh.
“We are optimistic that the government initiative to introduce this new act will help further expand the insurance sector in Bangladesh.”