The Insurance Development and Regulatory Authority (IDRA) has launched inspections of nine non-life insurance companies following allegations that some insurers continued paying commissions under various heads despite the suspension of individual agency operations.
The companies under inspection are Provati Insurance, Paramount Insurance PLC, Bangladesh National Insurance, Crystal Insurance, Asia Pacific General Insurance, Union Insurance, Global Insurance, Karnaphuli Insurance and Prime Islami Insurance.
The regulator said on Tuesday that complaints had been received that certain insurers were still offering commission-like payments through salaries, allowances, no-claim bonuses and other channels to attract business after the industry-wide suspension of individual agency activities.
Individual agency operations at non-life insurers were suspended from 1 January following a request from the Bangladesh Insurance Association and with the consent of the companies concerned. The move was intended to improve market discipline and promote fairer competition within the sector.
Industry stakeholders, however, alleged that some insurers continued to use alternative mechanisms to reward business acquisition, creating unhealthy competition and undermining implementation of the regulator’s directives.
To verify the allegations and assess compliance with existing rules, IDRA has formed three inspection committees. In a letter issued on 4 June, the authority instructed separate teams to conduct inspections at the selected companies.
IDRA said inspection reports would be submitted to its vigilance team for review. Appropriate action would be taken under existing laws and regulations if any violations are found.
IDRA Member for General Insurance Mohammad Abu Bakar Siddique said the inspections were aimed at verifying the allegations. He said legal action would be taken against any company if irregularities were established through the investigation.
