The polls-time government, formed to perform routine activities only in the run up to the upcoming national elections, on Thursday awarded licences to five new insurance companies owned by businessmen loyal to Awami League. Earlier on July 4 this year, the AL-led government had issued eleven new insurance licences on political consideration.Experts in the insurance and financial sectors said issuing licences was an unethical practice on the part of the polls-time government.
They feared that the new insurance companies would intensify unhealthy competition in the sector.
The Insurance Development and Regulatory Authority at a meeting on Thursday decided to give the licences though the insurance sector regulator had earlier informed the government that no new insurance company was required at the moment.
IDRA chairman M Shefaque Ahmed presided over the meeting.
The five companies which got the licences are Shawdesh Life Insurance, Jamuna Life Insurance, Trust Islami Life Insurance, Diamond Life Insurance and Alpha Islami Life Insurance.
Australian expatriate AL leader Zaker Ahmed Bhuiyan was awarded licence for Trust Islami Life Insurance.
A garment businessman, Nazim Ahamed, was awarded licence for Alpha Islami Life Insurance following an AL leader’s lobbing.
Chhatra League former general secretary Ishaque Ali Khan Panna got licence for Diamond Life Insurance, Chittagong AL leader and MP Mosharraf Hossain licence for Jamuna Life Insurance and Sheikh Russel Krira Chakra president Nurul Alam Chowdhury licence for Shawdesh Life Insurance.
‘The prime minister and some other lawmakers on several occasions have termed the present government as a polls-time government. If it is true, the government has no right to make such decision during this period as issuing licences for insurance companies is obviously a policy decision,’ former caretaker government adviser Mirza Azizul Islam told New Age.
He said, ‘I had protested when the government issued licences for new banks and insurance companies earlier. I did not support such step of the government as it would intensify the manpower shortage in the insurance sector.’
‘So many insurance companies have already distressed the insurance sector. Unethical practice has been increasing significantly in the sector due to intense competition for policy,’ former managing director of Green Delta Life Insurance Nasir A Choudhury told New Age.
Issuance of new licences on political consideration would worsen the situation in the sector, he said.
Bangladesh Insurance Association president Sheikh Kabir Hossain said the entry of the new companies would increase competition in the insurance sector.
‘But all insurance companies should take preparations by recruiting efficient manpower to tackle the situation.’
IDRA chairman Shefaque Ahmed could not be reached despite repeated attempts for his comment.
On July 4 this year the AL-led government awarded 11 new insurance licences — nine to life insurers and two to general insurers. The companies are yet to commence their business operation.
In 1996-2001, the previous AL-led government had issued licences to 11 new insurance companies, with three was given on the last day of the government’s tenure.
There are 62 insurance companies operating in the country. Of them, 43 are general insurers, 17 life insurers while the remaining two are government owned — one life and another non-life insurance company.
The government in this year awarded licences for nine commercial banks to some members of parliament of the ruling alliance and businessmen loyal to Awami League amid criticism.
-With New Age input
