IDRA fines 21 insurers over Tk 72 lakh

The Insurance Development and Regulatory Authority (IDRA) has fined 21 insurance companies over Tk 72 lakh for, among others, purchasing assets without its approval, charging higher premiums than the government fixed rates and forging letters.

Continental Insurance has to pay the highest, Tk 10.50 lakh.

The lowest, Tk 50,000, is payable individually by Meghna Insurance Company, Desh General Insurance Company, Asia Pacific General Insurance Company, Republic Insurance Company and Mercantile Islami Life Insurance.

Pragati Insurance was slapped the second highest, Tk 10 lakh, followed by Islami Commercial Insurance Company (Tk 9.50 lakh), Takaful Islami Insurance (Tk 9 lakh), Prime Insurance Company (Tk 8 lakh), Janata Insurance Company and Federal Insurance Company (Tk 5 lakh each), Agrani Insurance Company (Tk 3 lakh) and Rupali Insurance Company (Tk 2 lakh).

Islami Insurance Bangladesh, Eastland Insurance Company, Standard Insurance and Bangladesh National Insurance Company, Karnaphuli Insurance Company, Pioneer Insurance Company and Global Insurance faced Tk 1 lakh in fines each.

The insurers paid fines and the issue came up in an IDRA report for 2020-21, said SM Shakil Akhter, executive director of the IDRA. The punitive actions were taken based on complaints filed in 2020- 2021. The regulator imposed the fines as per findings of an audit firm hired to scrutinise the insurers, said Akhter.

The report said Continental Insurance violated an IDRA restriction regarding open cover policy, which is a type of marine insurance policy. Under it, the insurer provides coverage for all cargo shipped, according to Investopedia.

Mohammad Abu Bakar Siddique, chief executive officer of Meghna Insurance Company, said the IDRA had a directive regarding opening third-party motor insurance.

"Our field officers opened some third party motor insurance for a lack of awareness," he said.

SM Mizanur Rahman, company secretary to Pioneer Insurance, said, "We adopted a premium rate from abroad. We brought it and used it for marine cover note, but we did not inform the IDRA on time about that rate."

"This was our fault," he said.

The government-set premium rates on non-life insurance are meant to be abided by non-life insurance and violators are fined.