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77 new insurers apply for licence

  • Published at 05:01 am May 16th, 2013
77 new insurers apply for licence

The Insurance Development and Regulatory Authority (IDRA) has received 77 applications for registration of new insurance companies as deadline for submission of application ended yesterday.

Of them, 71 are life insurance and the remaining six are non-life insurance companies.

The government may issue licences to 10 new life insurers. Currently, there are 18 life insurance companies operating in the country making nearly a total of Tk60bn as annual turnover.

A total of 60 companies including a foreign entity Alico are running insurance business in the country.

On last day of application submission, IDRA received 57 applications.

Earlier, the insurance regulator extended the deadline three times.

Among the firms seeking registration, there are two foreign companies- Life Insurance Corporation of India jointly with local Square Group and Taiyo of Japan jointly with local Summit Group have submitted applications.

An official said they would start scrutiny of the applications from today as they have to report in next 40 days.

IDRA invited applications for registration of new insurance companies on February 20 this year.

Although the deadline was extended three times, yesterday there was rumour that the deadline might be deferred again.

The IDRA officials, therefore, faced a severe pressure till 6pm as most of the applications came in the late afternoon.

Each applicant had to deposit Tk180m in bank to avail of licence and pay non-refundable Tk500,000 as processing fee.

According to the 21 provisions of Insurance Act, the entrepreneurs will submit their respective part of paid-up capital free of liability to any scheduled bank in the company’s name. The deposit will be liability-free.

As the new Insurance Act, the paid-up capital of life insurance is Tk300m and non-life insurance is Tk400m. Further, 60% of the capital will be collected from sponsors and the remaining 40% from public.

Moreover, Brac, Square and Apex Group jointly submitted application for licence while the Armed Forces has applied for license for the company named `Shenakollyan Life Insurance’.

M. Shefaq Ahmed, Chairman of IDRA, said: “The regulator will decide who are eligible for licence. Lobbying is not allowed.”

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