The insurance regulator has reshuffled its surveillance teams in order to launch a clampdown on giving high agent commission illegally by non-life insurers for procuring business.
In July 2019, the Insurance Development and Regulatory Authority (IDRA) ordered all 45 non-life firms to implement 15 per cent agent commission from August 2019.
But, it is now alleged that many non-life firms have again started providing high commission to procure business. Many firms are even providing as high as 70 per cent commission, which is ultimately affecting financial health of the companies by weakening their ability.
The IDRA officials told the FE that the regulator wants to strengthen its surveillance on the non-life firms through field visits to ensure proper implementation of the directive.
They also said the national economy, battered by the coronavirus pandemic, is gradually recovering, and insurance business is also picking up.
"This is the right time to launch drives against providing commission at high rates, as many firms are not complying with the order," said an official at the IDRA.
Now two executive directors of the IDRA will lead the two surveillance committees. They are - executive director (law) and executive director (administration).
The 11-member committee, formed on September 01, can inspect the insurance firms concerned and scrutinise their bank transactions to identify whether they are complying with the order or not.
The IDRA order also asked the non-lifers to maintain specific bank accounts for companies, so that their earnings can be detected, for monitoring implementation of the directive.
The regulator's monitoring and inspection activities were weakened for the past few months following spread of the coronavirus pandemic in the country since March.
Currently, annual turnover of the privately-owned general insurance firms is around Tk 18 billion. There are 45 non-life insurers in the private sector. Another non-life and re-insurer is the state-owned Sadharan Bima Corporation, which earns around Tk 12 billion a year.
