Bdnews24.com

Insurers Wednesday urged commerce adviser Hossain Zillur Rahman to step in and press Sadharan Bima Corporation (SBC) into settling their claims.

The law requires general insurers to place 50 percent of their insurance with the state-owned general insurance company. But the settlement of claims is slowing because of what the industry leaders say is inordinate delay in payback by SBC.

At a meeting with the adviser, the insurers also requested that publication of the amended insurance law be expedited. The meeting organised by the Bangladesh Insurance Association (BIA) on its premises in the financial district of Motijheel was meant to highlight the problems facing the industry. BIA president Rafiqul Islam said that both life and general insurance business had been growing fast and contributing substantially to the economy.

The premium growth of the industry was almost 23 percent from 2005 to 2006. "The problems needed to be addressed as soon as possible to maintain the momentum of growth of the insurance industry," he added.

Islam identified what he called the SBC's unreasonable delay in settlement of claims and payment of cash loss as a major hindrance to business especially with the multinational companies in Bangladesh. More than 400 claims amounting to Tk 2,290 million have been piled up until June, 2006, Islam said.

"We think this is the reason that the multinationals are reluctant to do business with local insurers," he said. The BIA president added that multinationals insured only 1 percent of their holdings with local insurers. "The rest of it goes abroad." He said that the SBC felt shaky about settling claims in view of audit objection of commercial audit.

"They (SBC officials) know that audit would lead them to major difficulties. This situation would continue until the SBC management is taken over by professionals," he said. BIA also asked the government to revise its policies regarding corporate tax and assessment of income tax on insurers as well as income tax of agents.

Adviser Hossain Zillur Rahman said that the present administration's major challenge was how to co-ordinate efficiently within the government towards a problem-solving approach. "We, as the government, are in a process of learning continuously," Rahman added. The adviser said the insurance industry was an integral part of the economy.

"Insurance sector needs to be addressed seriously as Bangladesh is growing towards a mid-income state leading to expansion of business activities," he said. Responding to problems of the industry, Rahman said that the government would try its best to work for solving the problems the industry is facing. "We are taking it as one of our top priorities, as this industry indicates growth of the country's economy," he said.

The adviser also said that new clients were emerging for the industry and insurers needed to focus on that as well. "As an example, I would cite the shrimp farmers of the coastal belt who saw all their businesses ruined when cyclone Sidr battered the zone," Rahman said.