Life insurance will reduce costs by up to 15 percent

Restructuring the life insurance company’s field-level organizational structure will reduce the companies’ management costs by up to 15 percent.The Insurance Development and Regulatory Authority (IDRA) Chairman, Dr. M Mosharraf Hossain said. He also mentioned that the circular issued last Thursday will be effective from September 1.

He made the remarks at a virtual exchange meeting on Sunday (June 20, 2021) organized by the Insurance Reporters Forum (IRF), an organization of insurance journalists, on the problems and prospects of the country’s insurance sector. The meeting was chaired by IRF General Secretary Sakhawat Hossain Sumon and chaired by Golam Mawla, President of the organization.

Responding to a question from reporters at the meeting, the IDRA chairman said a life insurance company spreads a kind of notoriety when it does not pay its insurance claims on time. That is why we have taken steps to strengthen the financial base of life insurance companies. In the meantime, the supervisory level and commission structure have been restructured. This will reduce the cost of life insurance companies by up to 15 percent. Which will strengthen the financial position of the company.

“We have to deal with two issues,” he said. One is in the case of listed companies. The other is in the case of non-listed companies. What we are doing in the case of non-listed companies is that if they want to be listed on the capital market, we are not approving them if they do not hold 60% of the shares.

And for those who are listed or in the capital market, there are two complications. One is a legal complication, the other is an operational complication. Since they are listed on the capital market, they have to buy shares from the capital market to cover 60 percent of them. There are some problems in this case. Since the matter is legally stated here, we are emphasizing the legal issue and have continued discussions with the companies to implement it accordingly.

Dr. M Mosharraf Hossain said that the manpower problem of IDRA is a big problem. Insurance companies have about 20 million customers. The sector in which this huge population is involved, its regulatory body IDRA is being run with only 31 manpower. We have no place of our own. However, we have come a long way in solving this problem.

Sunbd/NJ