The Bangladesh Bank and the Insurance Development and Regulatory Authority (IDRA) have recently announced new guidelines for bancassurance. Under this framework, insurance companies must meet certain conditions and standards before partnering with banks.
Key requirements under the guidelines include:
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Licensed Institution: To participate in bancassurance, an insurance company must hold a valid license from IDRA and operate in compliance with all regulatory rules.
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Reliable Claims System: The company must have a proven and trustworthy claims settlement system to maintain customer confidence.
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Product Readiness: The company should have a prepared portfolio of life and non-life insurance products suitable for sale through banks. These products must be designed to meet the needs of bank customers and be easy to understand.
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No Exclusive Conditions: Insurance companies cannot impose exclusive conditions. This means a bank can partner with multiple insurance companies, and all companies must operate within a competitive framework.
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Limited Partnerships: Each bank can partner with a maximum of three life and three non-life insurance companies. All agreements will become effective only with approval from IDRA and Bangladesh Bank.
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Contract Amendments and Renewal: Any changes or renewals of agreements must be submitted to the relevant authority within 15 days.
Experts say that these guidelines will foster quality competition among insurance companies and ensure better customer service and accountability in the country’s insurance sector. By making insurance products more accessible through banks, this initiative will also play a crucial role in promoting financial inclusion.