Proper implementation of Insurance Act 2010 can reform sector: discussion meeting

Experts and industry stakeholders emphasised that the development and reform of Bangladesh's insurance sector depend primarily on the proper implementation of the existing Insurance Act 2010, rather than amending the law.

The Act already contains clear provisions for audits, investigations, appointment of administrators, removal of individuals involved in legal violations or embezzlement, and recovery of misappropriated funds. Experts said strict enforcement of these provisions could address the sector's ongoing challenges.

Speakers expressed these views at a discussion meeting on the proposed amendments to the Insurance Act 2010, held today (22 November) at the Dhaka Reporters Unity. Insurance News BD organised the event.

Speakers warned that the proposed amendments, granting the regulatory authority direct power to approve appointments of company chairmen, additional managing directors, CFOs and company secretaries, could negatively affect corporate governance. They argued that such measures might undermine the constitutional rights of directors and elected chairpersons, potentially forcing them to approach the courts unnecessarily, creating new crises instead of reforms.

Participants also noted that even after the July mass uprising, the Insurance Development and Regulatory Authority (IDRA) has been unable to take effective steps to reform the sector. Life insurance companies involved in fund misappropriation have neither recovered embezzled funds nor settled outstanding claims, and responsible individuals have faced no legal consequences. In the non-life insurance sector, efforts to eliminate illegal commissions and develop skilled manpower have also remained insufficient.

The keynote paper was presented by former IDRA life member Sultan-ul-Abedin Molla, who highlighted that the Insurance Act 2010 contains 160 sections, many with multiple subsections. In the proposed amendments, 99 of the core sections remain unchanged, while the subsections are subject to modification, addition or deletion. Additionally, 64 new sections and subsections have been proposed.

Molla criticised the amendments for prioritising regulatory control over sector development. While the amendments mention protecting policyholders' interests, he said they mainly propose granting greater authority to IDRA. He also cautioned that the overly broad definition of "family" in the amendments could complicate corporate governance.

Other speakers noted that the proposed amendments fail to clearly address key issues such as shareholder and policyholder funds, board composition and appointment procedures. They stressed that before amending the law, a thorough review is needed to address provisions that have remained unimplemented from 2010 to 2025.