The government is bringing major changes to the regulations regarding the appointment and removal of the chief executive officers (CEOs) of insurance companies operating in the country.
These amendments include the exemption of three years from existing required work experience for CEO appointment, emphasis on graduation results, and limiting the avenues for providing additional facilities in the name of increments and incentives.
On July 11, the Financial Institutions Division of the Finance Ministry sought feedback on the revised draft notification of this regulation. Stakeholders and public feedback on the draft has been requested within 15 days.
The ministry has published a copy of the draft regulations, proposed by the sector’s regulator Insurance Development and Regulatory Authority (IDRA), which showed that the 2012 regulations for appointment and removal of CEOs (Bima Company Probidhan Mala, 2012) are being amended.
According to the draft of the amended regulations, the aspirant CEO will have to have two-year experience of working as the CEO or in the immediate lower position at an insurance company and 12 years of overall work experience in the insurance business.
However, the authorities may, if it deems fit, sanction the CEO’s appointment in derogation of the said conditions. But this may only happen in insurance companies in which the government has more than 50 per cent shares and if they are related to the government or government departments, agencies and institutions.
Moreover, IDRA can approve the appointment of a person as CEO in a local company if they have at least 10 years of direct work experience in the insurance business in a senior management position in an internationally well-known multinational insurance company.
At present, 15 years of work experience in the insurance business, including a minimum of three years in the immediate lower position, is required for the appointment of a CEO, which means the draft regulations have exempted one year of work experience in the immediate lower post and three years of experience in the insurance business.
Also, the draft regulations have allowed appointing government officials and employees of foreign multinational insurance companies as CEO.
One will have to have at least 2nd Class Bachelor's and Master's degree from a recognized University or 2nd Class four-year Bachelor's or equivalent degree to meet the educational qualification for appointment as CEO, says the draft regulations.
Government policies will apply to the results of the grading process. However, foreign university degree holders will have to submit the equivalency certificate from the University Grants Commission of Bangladesh.
At present, no category of educational qualification is specified in the regulations. A 3rd class graduate degree is also acceptable for the appointment of CEO. Even the matter of the acceptability of foreign university degrees is not clear.
In the draft regulations, the provision of minimum age of 40 in case of disqualification of the CEO candidate has been removed and the provision on reappointment till the completion of 67 years of age on expiry of the term has been added.
Regarding the CEO’s total salary, the draft regulations said the total salary would comprise of basic salary, house rent and other allowances (where provident fund, medical allowance, festival allowance, insurance amount and the limits of one or more incentive bonuses would have to be mentioned in specified figures). In this case, one or more incentive bonuses will not exceed Tk 10 lakh in a year.
