A NATIONAL daily reported on Wednesday that in a rare move Bangladesh Insurance Development and Regulatory Authority (BIDRA) has revoked the license of Standard Insurance Co for failing to operating mandatory reinsurance policies to the tune of Tk. 46.5 crore so far against existing policies. The company also reportedly violated laws concerning renewal of license, policy reinsurance and such other rules in the past and the BIDRA actions appear to have come at the right time we believe to warn other violators also not to flout standard business practice.
We know there are many insurance companies regularly cheating policyholders and depriving them of their welfare benefits they promised at the time of opening policies. Many even end up in losing their deposits although the company field officers make lofty promises to lure people to open policies. But in reality, there is little conformity in many cases between words and deeds. Under the reinsurance scheme; a policyholder is protected by the reinsurers; but if the company does not open a reinsurance policy, the policyholders continue to be at high risk. With the mesmerizing words innocent people often confront into policy-fabrication and get formidably betrayed. Poorly educated people mainly fall into the trap.
Total number of insurance companies are hefty in the country but there are only two government-owned insurance bodies – Shadaharan Bima Corporations and Jibon Bima Corporations and they are also not following fair business practice in many cases. Not only some companies are not taking reinsurance, some others are getting extra privileges by opening reinsurance policies in terms of policy settlement under false claims in exchange of vast commission they take illegally. In many cases, the government owned corporations act to the privilege of some selected clients upon pressure from political quarters. But such practices are helping the spread of corruption and evil practice in the insurance sector.
There are many self engineered cases of arson in godowns of businesses or damage to stocks and such other properties for which a person may make claim for compensation against existing policies and reinsurers have to compensate it. In many cases big business houses owns insurance companies and they open policies with them only to use it technically to claim bigger compensation against smaller losses or perceived losses.
In fact the insurance sector is most vulnerable to mislead people exacerbated by lack of regular monitoring and effective demand for compliance of standard rules of business. We believe the cancellation of license of the company in question will work as an alarm bell to all others indulging in unfair practices.
