IDRA warns strict action against CEOs of insurers

The Insurance Development and Regulatory Authority (IDRA) says it will take a hard line on the chief executive officers (CEOs) of life and non-life insurers if they enjoy additional facilities other than their salaries.

The regulatory body’s law department has already prepared a directive to prevent the CEOs of insurance companies from taking such benefits.

IDRA sources said they would send a letter along with the directive to the insurance companies soon.

A draft letter of the IDRA said the CEOs of some insurance companies are taking additional benefits beyond their salaries and allowances, which is contrary to the Insurance Act 2010.

Strict action will be taken against these companies, it said.

An IDRA official told The Business Post it was recently found that some insurance companies’ CEOs are taking various benefits, such as performance bonus, profit bonus, guest allowance, and provident fund, beyond their salaries and allowances.

He said this is against the insurance law.

To prevent such practices, the IDRA will issue the directive soon to ensure transparency in the insurance sector and protect the interests of policyholders.

Insurers’ cost management scenario in last five years

According to the IDRA data, management costs of most of the life insurance companies exceeded their desired limits, which reached Tk 202 crore in 2016.

Subsequently, the excessive management cost of 32 companies was Tk 109 crore in 2017, Tk 159 crore in 2018, Tk 133 crore in 2019, and Tk 208 crore in 2020.

Company insiders said management costs mounted as insurance companies failed to earn much from premiums while the expenses centring utility, workers, and management continued during the pandemic.

Besides, the IDRA will also inspect the rational cause behind the hiked management costs, they said.