IDRA strict to bring compliance

The Insurance Development and Regulatory Authority (IDRA) is now being strict when it comes to ensuring compliance in the sector so as to improve its lacklustre performance, according to Mohammad Jainul Bari, chairman of the IDRA.

The IDRA is strengthening its monitoring activities to prevent regularities, such as embezzlement. If an irregularity is detected, then the IDRA will punish those insurance companies or officials responsible.

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This includes dissolving the offending company's board of directors as well as ordering them to sell assets in order to settle claims.

Besides, the IDRA is taking measures to modernise insurance laws, he said.

"But it is true that the situation will not change overnight as the IDRA alone will not be able to bring discipline to the sector. Still, we are trying," Bari added.

He made these comments at a discussion, styled "CMJF Talk", organised by the Capital Market Journalists' Forum (CMJF) at its office in Dhaka.

Bari then said most embezzlement by insurance companies was committed in buying land.

In some cases, the companies purchased land at such an overvalued price it could not be sold for the same value even after 10 or 15 years.

And while situation of some life insurers is so bad that they should close down, their clients would ultimately be the ones to suffer.

"So, the IDRA is trying to improve the situation through strong monitoring," he added.

Bari went on to say the regulator is focusing on bringing proper monitoring and new products to the sector while also facilitating digitalisation and compliance among insurers.

However, the IDRA needs more manpower to achieve a strong monitoring capacity like that of Bangladesh Bank as the insurance sector has huge potential to grow.

Regarding crop insurance, Bari said a couple of companies are running pilot projects in this regard.

And although the IDRA aims to make crop insurance a mainstream product, the main issue is that it is a loss-making scheme, he added.

Ziaur Rahman, president of the CMJF, chaired the discussion presided over by Abu Ali, secretary general.