Insurers which might be struggling to settle claims
Quite a few life insurance coverage corporations in Bangladesh struggled to settle claims in 2022 because of an absence of liquidity ensuing from unhealthy investments and fund embezzlement by their chairmen and administrators.
Of the 35 life insurers working within the nation, the declare settlement price of 5 corporations stays beneath 40 %, in keeping with information of the Insurance coverage Improvement and Regulatory Authority.
Baira Life Insurance coverage is within the worst place, having paid out simply 1.83 %, or Tk 1 crore, of its purchasers’ claims amounting to Tk 56.9 crore in 2022.
Equally, the settlement price of Fareast Islami Life Insurance coverage stood at 21.2 % final 12 months, with the corporate having paid out Tk 970 crore towards claims of Tk 4,559 crore.
In the meantime, the declare settlement price of Sunflower Life Insurance coverage and Golden Life Insurance coverage was 24.6 % and 37.7 % respectively.
Likewise, Progressive Life Insurance coverage settled 39 % of its claims in 2022.
On situation of anonymity, a prime official of a number one life insurance coverage firm mentioned some life insurers are struggling to settle claims as they made quite a few unhealthy investments, the place the return was insignificant.
Additionally, among the corporations are going through a liquidity crunch as their life fund has been embezzled, he added.
With this backdrop, the IDRA appointed observers in 4 life insurance coverage corporations final June.
The businesses are Progressive Life Insurance coverage Firm Restricted, Sunlife Insurance coverage Firm Restricted, Padma Islami Life Insurance coverage Restricted, and Golden Life Insurance coverage Restricted.
In 2021, the Bangladesh Securities and Trade Fee reconstructed the board of Fareast Islami Life Insurance coverage to guard traders’ funds after discovering that the corporate’s administrators had embezzled funds.
The regulator discovered by way of an audit that Fareast’s former chairman and administrators dedicated serial monetary crimes and siphoned off policyholders’ funds price greater than Tk 2,100 crore between 2010 and 2020.
Sheikh Kabir Hossain, chairman of the reconstructed board of Fareast Islami Life Insurance coverage, instructed the My Information final month that the corporate is “sick” because it owes some huge cash whereas its house owners are in jail.
The federal government had arrange a brand new board of administrators to revive Fareast Islami to its earlier place, however they haven’t made a lot progress to date.
“And because of this illness, it’s not attainable to pay again money owed on the required price,” Hossain added.
High officers of the Baira, Sunflower, and Golden life insurance coverage corporations couldn’t be reached for a remark by the point this report was filed.