Regulator fines eight insurers

The insurance regulator fined seven general and one life insurers in the last two days as the companies violated rules to win business. Chief executive officers and some branch managers of the companies were also warned against irregularities.

“We will carry on our drive. Branches of other companies will be inspected next week,” Fazlul Karim, acting chairman of Insurance Development and Regulatory Authority, told The Daily Star yesterday.

Inspection teams of the regulator found that the firms were violating tariff rates, doing business in cash and credit and charging commission beyond the
permissible limit.

The companies that were fined are Union Insurance, Mercantile Insurance, Global, Janata, Provati, Eastern, Standard and Padma Life. Eastern Insurance was fined Tk 50,000 after IDRA inspectors found that the insurer's Faridpur branch was doing business on credit. The regulator fined the manager of Standard Insurance's Karwan Bazar branch Tk 50,000 for violating the tariff rates. The regulator also fined Standard another Tk 1 lakh for doing business on credit and cash.
Global Insurance was fined Tk 1 lakh for doing business in credit at its Narayanganj branch. The IDRA also warned the insurer of closing the branch and sacking its manager if similar wrongdoings are detected again.

Mercantile Insurance was fined Tk 50,000 for doing business in credit. The chief executive officer and Khulna branch manager of the insurer have also been warned. Janata Insurance, Provati Insurance and Union Insurance have been fined for giving commission to employees and not maintaining records of business.

The IDRA cautioned the chief executive officers and branch managers concerned of these companies for violating rules. Though the government enacted a new insurance law in 2010 and gave the authorities adequate control over the errant insurers, the regulator is yet to get sufficient employees to monitor activities of more than 70 companies. Cashing in on the weaknesses of the authorities, errant insurers have been violating tariff rates, paying illegal commission to clients and making transactions in cash instead of commission. (Source: The Daily Star, 04/ 03/ 2014)