Bangladesh considers ending mandatory reinsurance with SBC

The Financial Institutions Division (FID) has projected removing a proviso from the Insurance Corporation Act 2019 that mandates non-life insurers successful Bangladesh to cede fractional of their reinsurance concern to the state-owned Sadharan Bima Corporation (SBC), reported the Financial Express.

The determination follows recommendations from the Insurance Development and Regulatory Authority (IDRA), which cited debased assertion colony ratios successful the sector.

According to IDRA data, the country’s non-life security assemblage had a assertion colony ratio of lone 35.54% arsenic of December 2023.

Research initiated by the IDRA president identified mandatory reinsurance with SBC arsenic a cardinal origin down these debased figures.

The findings suggested that obliging each 42 non-life wide insurers to reinsure done SBC led to inefficiencies successful assertion settlements.

The projected amendment to the Insurance Corporation Act 2019 aims to code these issues.

However, the proposition has caused interest among SBC staff.

Employees of the corp person publically protested against the proposal, arguing that it threatens SBC’s beingness and urging lawmakers not to instrumentality changes earlier a caller authorities is elected.

Speaking to the Financial Express, IDRA representatives stated that if enacted, the changes could amended some assertion colony rates and the travel of overseas superior into Bangladesh.

Sector insiders besides pointed retired that SBC’s deficiency of an internationally recognised recognition standing has hindered entree to overseas funds for improvement projects, the study added, citing sources.

Audited figures from the IDRA up to December 2024 amusement that SBC owes much than Tk14bn ($114.78m) to insurers who person yet to person payments.

Conversely, insurers reportedly beryllium Tk9.28bn to SBC successful unpaid premiums.

SBC wide manager S M Shah Alom attributed delays successful settling claims to missing documentation successful assertion files and besides noted that insurers owed wealth to SBC.

The IDRA argues that ending mandatory reinsurance with SBC could besides fortify backstage reinsurers and facilitate introduction for overseas reinsurers into Bangladesh's market.

"Bangladesh considers ending mandatory reinsurance with SBC " was primitively created and published by Life Insurance International, a GlobalData owned brand.

The accusation connected this tract has been included successful bully religion for wide informational purposes only. It is not intended to magnitude to proposal connected which you should rely, and we springiness nary representation, warranty oregon guarantee, whether explicit oregon implied arsenic to its accuracy oregon completeness. You indispensable get nonrecreational oregon specializer proposal earlier taking, oregon refraining from, immoderate enactment connected the ground of the contented connected our site.