for public exchequer :
After achievement of independence in 1971, Bangladesh nationalised many industries turning them into public sector corporations. Most of the nationalised industries started incurring losses and got indebted to banks because of corruption and mismanagement. Many units of some corporations have been disinvested and returned to original Bangladeshi owners and many units belonging to Pakistani owners have been sold out to highest bidders in the denationalization process. But Sadharan Bima Corporation (SBC) comprising of general insurance companies has proved to be a very successful public sector corporation earning huge annual profits and paying highest amount of taxes and profits to public exchequer. SBC has branches spread in 64 districts all over Bangladesh.
Long 42 years have elapsed since Sadharan Biman Corporation was formed in 1973 following nationalisation of insurance industry in 1972 with 49 insurance companies that were doing business during pre-liberation period. For eleven years, SBC could do monopoly business. But in 1984, the government amended the Insurance Corporation Act, 1973 allowing formation of insurance companies in the private sector to underwrite the general insurance business for the private sector insurance business only.
And six years later in 1990, the Insurance Corporation Act, 1973 was further amended with the provision that fifty per cent of all insurance business relating to public property shall be placed with the Sadharan Bima Corporation and the remaining fifty per cent of such business may either be placed with the SBC or with any other private insurers in Bangladesh. This amendment resulted in adverse impact on the direct premium income of the SBC.
Product range of SBC includes Property Insurance Policy, Marine, Motor, Engineering, Aviation and Miscellaneous Accident Policy.
Available statistics show SBC’s profit has steadily increased from BDT 110.50 crore in 2009 to BDT 125.50 crore in 2010, BDT 175.19 crore in 2011, BDT 180.37 crore in 2012 and BDT 218.40 crore in 2013-the profit nearing double in five consecutive years.
As a rule, SBC has paid BDT 20 crore of profit to public exchequer every year in addition to paying income tax at varying rates year after year. In 2009 SBC paid income tax worth BDT 27.75 crore to public exchequer and in 2013 the amount of income tax paid by SBC increased to 55.84 crore-the increase is more than double in five years.
“The governmental amendment of Insurance Act 1990 resulted in an anomaly as to underwrite insurance policy of 50 per cent public property because a single property cannot be underwritten by two companies. This is why Sadharan Bima Corporation and non-life private insurance companies had to sign an MOA (memorandum of agreement) for 100 per cdent underwriting of public properties by Sadharan Bima Corporatioin and, from those, SBC would distribute 50 per cent premium and liabilities arising out of such insurance business among all non-life private insurance companies.”
“The problem will be resolved when the provision of underwriting 100 per cent public sector insurance business will be inserted in Insurance Act 2015, as none other than Sadharan Bima Corporation shall underwrite any non-life insurance business relating to any public property or to any risk or liability appertaining to any public property and SBC shall distribute 50% premium and liabilities arising out of such insurance business among all non-life private insurance companies whom it is obligatory to receive on equal share basis,” said the Managing Director of SBC while talking to this correspondent at noon on December 8 last.
The Managing Director of Sadharan Biman Corporation, Md. Rezaul Karim, started his career in the SBC in 1981 as a trainee officer and now he has become a specialist in General Insurance and Export Credit Guarantee insurance.
During his career with SBC, Rezaul Karim has attended a number of training and workshops on insurance and reinsurance and financial matter both at home and abroad.
For the purpose of training, workshop, seminar and insurance development and related program he has visited UK, Japan, China, Australia, The Philippines, India, Saudi Arabia, Turkey and Thailand. Before joining SBC he completed B.Com (Hon’s) and M.Com (Management from Dhaka University.
Meanwhile, talks with a senior official of SBC in the afternoon on December 10 (Thursday) revealed that because of shortage of workforce, the existing employees numbering 900 in place of required 2,600 employees have to bear extra workload.
Hence the sooner the SBC is allowed to recruit 1700 more employees the better it will be for the public sector corporation that has been contributing greatly to public exchequer from the beginning.
A New Nation Report
After achievement of independence in 1971, Bangladesh nationalised many industries turning them into public sector corporations. Most of the nationalised industries started incurring losses and got indebted to banks because of corruption and mismanagement. Many units of some corporations have been disinvested and returned to original Bangladeshi owners and many units belonging to Pakistani owners have been sold out to highest bidders in the denationalization process. But Sadharan Bima Corporation (SBC) comprising of general insurance companies has proved to be a very successful public sector corporation earning huge annual profits and paying highest amount of taxes and profits to public exchequer. SBC has branches spread in 64 districts all over Bangladesh.
Long 42 years have elapsed since Sadharan Biman Corporation was formed in 1973 following nationalisation of insurance industry in 1972 with 49 insurance companies that were doing business during pre-liberation period. For eleven years, SBC could do monopoly business. But in 1984, the government amended the Insurance Corporation Act, 1973 allowing formation of insurance companies in the private sector to underwrite the general insurance business for the private sector insurance business only.
And six years later in 1990, the Insurance Corporation Act, 1973 was further amended with the provision that fifty per cent of all insurance business relating to public property shall be placed with the Sadharan Bima Corporation and the remaining fifty per cent of such business may either be placed with the SBC or with any other private insurers in Bangladesh. This amendment resulted in adverse impact on the direct premium income of the SBC.
Product range of SBC includes Property Insurance Policy, Marine, Motor, Engineering, Aviation and Miscellaneous Accident Policy.
Available statistics show SBC’s profit has steadily increased from BDT 110.50 crore in 2009 to BDT 125.50 crore in 2010, BDT 175.19 crore in 2011, BDT 180.37 crore in 2012 and BDT 218.40 crore in 2013-the profit nearing double in five consecutive years.
As a rule, SBC has paid BDT 20 crore of profit to public exchequer every year in addition to paying income tax at varying rates year after year. In 2009 SBC paid income tax worth BDT 27.75 crore to public exchequer and in 2013 the amount of income tax paid by SBC increased to 55.84 crore-the increase is more than double in five years.
“The governmental amendment of Insurance Act 1990 resulted in an anomaly as to underwrite insurance policy of 50 per cent public property because a single property cannot be underwritten by two companies. This is why Sadharan Bima Corporation and non-life private insurance companies had to sign an MOA (memorandum of agreement) for 100 per cdent underwriting of public properties by Sadharan Bima Corporatioin and, from those, SBC would distribute 50 per cent premium and liabilities arising out of such insurance business among all non-life private insurance companies.”
“The problem will be resolved when the provision of underwriting 100 per cent public sector insurance business will be inserted in Insurance Act 2015, as none other than Sadharan Bima Corporation shall underwrite any non-life insurance business relating to any public property or to any risk or liability appertaining to any public property and SBC shall distribute 50% premium and liabilities arising out of such insurance business among all non-life private insurance companies whom it is obligatory to receive on equal share basis,” said the Managing Director of SBC while talking to this correspondent at noon on December 8 last.
The Managing Director of Sadharan Biman Corporation, Md. Rezaul Karim, started his career in the SBC in 1981 as a trainee officer and now he has become a specialist in General Insurance and Export Credit Guarantee insurance.
During his career with SBC, Rezaul Karim has attended a number of training and workshops on insurance and reinsurance and financial matter both at home and abroad.
For the purpose of training, workshop, seminar and insurance development and related program he has visited UK, Japan, China, Australia, The Philippines, India, Saudi Arabia, Turkey and Thailand. Before joining SBC he completed B.Com (Hon’s) and M.Com (Management from Dhaka University.
Meanwhile, talks with a senior official of SBC in the afternoon on December 10 (Thursday) revealed that because of shortage of workforce, the existing employees numbering 900 in place of required 2,600 employees have to bear extra workload.
Hence the sooner the SBC is allowed to recruit 1700 more employees the better it will be for the public sector corporation that has been contributing greatly to public exchequer from the beginning.
A New Nation Report
