The Bangladesh Insurance Association (BIA) has sought suspension of the gazette notification that introduced the Bancassurance Guideline in the country, as there is a need to amend some aspects of the rule.
BIA sent a letter in this regard on Thursday to the Financial Institutions Division secretary, Bangladesh Bank governor, Insurance Development and Regulatory Authority of Bangladesh (IDRA) chairman and all insurance companies' chief executive officers.
The letter, signed by association President Sheikh Kabir Hossain, read, “The Financial Institutions Division recently sent the guideline to the central bank for issuing a gazette notification. This notification has come to the attention of BIA.
"We have discussed the matter with the Financial Institutions Division secretary, IDRA chairman over the phone, and requested them to suspend the gazette notification temporarily to amend some provisions of the Bancassurance Guidelines.
The Business Post had published an article on these guidelines on Thursday.
This guideline mentions that banks cannot legally be held accountable for any risks arising from policy sales, and the guideline encourages launching an awareness campaign to inform customers about this matter.
It discusses and defines 25 key points, including eligibility of corporate agents; issuance, renewal, suspension and cancellation of licenses; agreements, premium collection, processing of policy sold under bancassurance; commission rates; and settlement of claims.
A customer will fill up the insurance proposal, and pay the premium to a bank serving as a corporate agent. The bank will provide the customer with a receipt. If the insurance firm accepts the proposal, the customer will get the final receipt and insurance documents.
If the insurance firm refuses the proposal, it will notify its corporate agent. The bank will have to refund the customer within three business days for life policies, and seven days for non-life policies.
On behalf of a non-life insurance firm, a corporate agent will be able to sell group insurance, health insurance, and products designed for small and medium enterprises.
According to the bancassurance guideline, a corporate agent will collect premiums into a designated account belonging to the insurance firm. Quarterly reports must be prepared through designated software.
A bank, under no circumstances, will be allowed to adjust commissions with premiums.
According to the bancassurance guideline, a customer or his/her nominee will have to contact the relevant insurance firm to settle claims on life insurance, policy maturity, policy surrender, and health insurance.
The guideline clearly mentions that a corporate agent will not raise any question if the relevant insurance firm seeks customer information for claims settlement. Moreover, if an insurance firm decides that an insurance claim has no merit, the corporate agent will not get involved.
