Progressive Life Insurance Co – a listed firm – has been suffering from internal conflict over the position of CEO for several months, which in turn has hampered company operations to the point of disrupting payment of insurance claims.
The issue has become so severe that the Insurance Development and Regulatory Authority of Bangladesh (IDRA) and Bangladesh Securities and Exchange Commission (BSEC) have stepped in to bring the company back on track.
Insiders say the ongoing feud is regarding the retention of Zahir Uddin – the firm’s acting CEO. The company has accumulated insurance claims amounting to Tk 350 crore. Of the figure, Tk 180 crore in claims have been approved.
However, the company has only Tk 165 crore, even though on paper it has Tk 290 crore in deposits.
In the company's last board meeting on July 31, the then acting CEO Zahir Uddin was dismissed, and Shahjahan Azadi was appointed in the same position.
Issued on the same day, a letter signed by the firm’s Acting Chief Executive Officer Shahjahan Azadi reads that Zahir Uddin is no longer needed in the company, so he has been dismissed according to the decision of the emergency board meeting.
On August 3, Zahir Uddin sent a letter to the chairmen of IDRA and BSEC detailing the instability within Progressive Life. It added that the decision taken by the illegal meeting without quorum is annulled. Zahir also requested an opportunity to perform his duties and responsibilities.
When IDRA Member (Life) Quamrul Hasan was contacted in this regard, he advised contacting the spokesperson of the organisation. Later, when IDRA spokesperson Jahangir Alam was contacted, he said no decision has been taken yet regarding the complaint of Progressive Life.
The Business Post tried to reach out to Shahjahan Azadi on phone for his comments on the matter, but he did not respond till the filing of this report.
On this issue, Zahir Uddin said, “I am being removed from the post illegally. Even if I did not hand over the responsibility, Shahjahan Azadi is already sitting in my chair and performing the designated duties.
“By unfairly removing me from the position of acting CEO, a vested quarter in the company wants to take over operations to serve their own interests. The company’s policyholders have also been affected by this issue.”
In a letter to the chairman of Progressive Life last June, IDRA had termed illegal the matter of Zahir Uddin performing the duties of acting CEO. It also recommended giving this responsibility to the previous CEO’s immediate successor.
Director of the organisation (law) Abdul Majeed signed the letter. The deadlock in the company became visible since this move.
In response to the IDRA letter, Progressing Life Acting Chairman Golam Mostafa Ahmed pointed out that the majority of the firm’s directors support Zahid Uddin in the position of acting CEO.
At that time, in a move aimed at protecting the interests of policyholders and ensuring good governance, the IDRA appointed an observer to the board of Progressive Life Insurance Company.
This decision comes in response to a growing number of complaints filed by policyholders with the IDRA regarding the delay in settlement of insurance claims by Progressive Life Insurance Company Ltd.
A month after the installation of the IDRA observer on July 13, the capital market regulator BSEC reshuffled the board of directors of Progressive Life Insurance, where five independent directors were appointed.
The commission also nominated five independent directors for the company's board – Brig Gen Md Zakir Hossain, ex-chairman of the Bangladesh Textile Mills Corporation; Dr Mohammed Forashuddin, ex-governor of the Bangladesh Bank; Dr Md Jamil Sharif, associate professor of Dhaka University; Dr Tazrina Farah, associate professor of Dhaka University; and M Shoeb Chowdhury, chairman of The Asian Age.
Zakir has been nominated as the next chairman of the Progressive Life.
Speaking to the correspondent on Monday, he said, “The first board meeting will be held on Tuesday under my leadership. I hear there that the company is suffering a lot of complications. I do not want to comment on the issue at the moment without full knowledge.”
The Progressive Life Insurance Company was transferred from the “A Category” to the “Z Category” in a day as it did not declare dividends or hold an annual general meeting (AGM) for the last two years.
According to the financial report for third quarter of 2022 (January to September) available on the company's website, its life fund size for January to September 2022 was Tk 276 crore, which is 0.49 per cent higher compared to the same period of the previous year.
Progressive Life’s net premium at the end of September fell by 45.68 per cent compared to the same period last year. The company's net premium stood at Tk 23.69 crore during the period, compared to Tk 43.62 crore in the same period last year.
The firm's ability to pay insurance claims has also fallen by about 30 per cent compared to the same period last year. In the first nine months of 2022, the company paid Tk 36.29 crore in insurance claims, compared to Tk 51.63 crore in the same period last year.
Zahir Uddin recently claimed that Quamrul Hasan, Member (Life) of the IDRA, has sought bribes.