At a recent discussion on the Insurance Act-2010 Amendment, experts emphasized the need for proper enforcement of existing regulations in the insurance sector to bring about meaningful reform. The session, organized by Insurance News BD at Dhaka Reporters Unity, focused on the Insurance Development Regulatory Authority (IDRA) and its role in improving the industry, especially after the July uprising that highlighted existing gaps in regulatory oversight.
Key Points from the Discussion
- Need for Proper Implementation of Current Laws
Experts argued that rather than pushing for new amendments, reform could be achieved by fully implementing the Insurance Act-2010. They noted that the IDRA had not taken significant action following the July events, particularly when it came to enforcing regulations or addressing financial misconduct in the sector.
The speakers were concerned about the regulatory body’s inaction regarding the recovery of embezzled funds from life insurance companies and its failure to address customer claims or pursue legal actions against those involved in financial malpractice. - Concerns Over the Proposed Amendment
Some of the proposed changes to the Insurance Act raised alarm. Specifically, the proposal to give IDRA the authority to approve the appointment of senior management, including the chairman, additional managing director, CFO, and company secretary, was criticized. Experts felt this could have negative consequences for the operational flexibility of insurance companies and might lead to unnecessary bureaucratic delays. - Lack of Focus on Development
The discussion also touched on the imbalance in the proposed amendments, with Kazi Md Mortuza Ali, Director General of the Bangladesh Institute for Professional Development, highlighting that the amendments seemed to prioritize regulation over the development of the industry. He pointed out that while the law was initially introduced to safeguard customers’ interests, the proposed changes don’t offer clear strategies for industry development. Furthermore, there was little attention given to enhancing the understanding of insurance among the public, which remains a barrier to the sector’s growth. - The Issue with Introducing New Roles and Definitions
The amendment proposal includes a new role, the “investigator,” but lacks clarity on its qualifications or the importance of risk science and risk management, which are crucial to the insurance sector. The amendment also introduces a comprehensive definition of family, including grandchildren, which raised questions about its practicality. - Concerns About Microcredit Institutions
The proposed amendments also encourage microcredit institutions to engage in insurance business. Experts warned that this could undermine the stability of the insurance market since, in their view, only licensed insurance companies should be allowed to offer such services. The proposal to allow microcredit institutions could dilute the sector’s professional standards. - Bancassurance and Corporate Agents
Another point of concern was the definition of insurtech companies and the ambiguity around the formation and management of such entities. Experts noted that banks currently act as corporate agents in bancassurance, but the law fails to address how these agents should be managed and appointed. The proposal to regulate top management appointments in insurance companies also raised questions about qualifications and oversight. - Clarity and Consistency in Definitions
The general consensus among experts was that while reform is necessary, the amendment needs to be more clearly defined and structured to allow for smooth implementation. The vagueness of terms like “investigator” and unclear definitions could create confusion and hinder progress.
Conclusion
The experts in the discussion agreed that reforming the insurance sector requires more than just legal amendments—it needs effective enforcement of existing laws. The IDRA must be empowered and proactive in enforcing regulations, recovering misappropriated funds, and protecting consumers. As the debate continues, there is a growing call for clarity in the proposed changes, with a strong emphasis on balancing regulation with the industry’s development needs. Without these adjustments, the goal of achieving a more efficient, transparent, and customer-focused insurance sector may remain elusive.