Finance Minister AHM Mustafa Kamal has said the non-listed insurance companies will have to enter the capital market by December this year to further strengthen the bourses and the economy.
The minister came up with the statement on Sunday while talking to the reporters after attending a meeting on the country’s insurance sector at the NEC Conference Room in the city’s Sher-e-Bangla Nagar.
Insurance Development Regulatory Authority (IDRA) Chairman Md Shafiqur Rahman Patwari, Financial Institution Division Senior Secretary Md Ashadul Islam, Bangladesh Insurance Association (BIA) President Sheikh Kabir Hossain and managing directors and CEOs of the insurance companies attended the meeting.
Mentioning that some 47 insurance companies are already listed with the capital market, the minister said, the rest companies will have to be enlisted with the capital market within the new timeframe.
“These insurance companies were initially given deadline for entering the capital market before awarding them with licenses. But unfortunately, those are yet to enter the capital market. The IDRA and BIA have assured us that the non-listed insurance companies will enter the capital market,” he said.
Kamal said if those companies fail to become cent per cent compliant, then the licenses of those non-listed companies would be initially suspended temporarily.
The minister also said if those companies fail to rectify themselves, then there might be merger of companies and if those companies fail to comply finally, then their licenses would be scrapped permanently.
“The government preserves the right to nullify or cancel the licenses, but I think everyone will comply with the decision,” he said, adding that the government and the BIA would work together to develop the human capital in this sector.
The finance minister said the BIA has demanded of the government to keep every building and flat under the coverage of insurance side by side introducing accident insurance.
“If every citizen can be brought under the coverage of insurance, then it (insurance) would play a strong role in the country’s economy as a strong financial tool,” he said, adding that the insurance premium should have to be in competitive rates.
He said that the government is planning to observe the ‘National Insurance Day’ on March 1 from the next year when the entire nation would be a part of the centenary celebration of the Father of the Nation Bangabandhu Sheikh Mujibur Rahman’s birth anniversary.
Mentioning that the insurance sector is a strong area of the country’s economy, Kamal said earlier there were misperception, propaganda and crisis of confidence over this sector.
“But, now this sector has overcome all these obstacles,” he said, adding that plan is there to further diversify this sector.
The finance minister also said that 15 per cent commission would be fixed for all of those who would sell the insurance.
IDRA Chairman Shafiqur Rahman Patwari said that various types of insurance services would be introduced to further enhance the penetration of this sector while a database would be developed highlighting the clients’ details and policy numbers.
According to the IDRA, there are some 78 insurance companies in the country including 32 life insurance companies and 46 non-life insurance companies.
The country’s insurance sector witnessed an overall investment of Taka 369.35 billion in 2018 with a 3.20 per cent growth.