Pay outstanding claims within June: IDRA to Homeland Life

The Insurance Development and Regulatory Authority (IDRA) has issued eight directives to the directors of Homeland Life Insurance to pay its outstanding insurance claims within this month.

The regulator also directed the company authorities to bring discipline in its management, ensure compliance with the authority’s instructions and reduce additional management expenses.

The letter, signed by IDRA Director Md Jahangir Alam, was issued on Tuesday.

The directives include – payment of all outstanding insurance claims till June 2023; submitting a business plan for the next three years; increasing policy renewal rate to at least 60 per cent; keeping management expenses within allowed limits; adjusting additional management expenses the current year to bring it down to sanctioned limit within the remaining period of the year; taking appropriate initiatives to increase the life fund of the company; properly provisioning unsettled insurance claims; and investigating the misappropriation of company funds and taking legal action against those responsible.

According to company sources, Homeland Life has an outstanding insurance claim around Tk 77 crore. However, instead of settling the claims, company authorities chose to pay dividends to shareholders by showing arrears against insurance claims of customers.

The company paid the dividends without a proper calculation of the provision that would protect the interests of the customers.

Earlier, on September 21 last year, authorities arrested and sentenced seven expatriate directors of Homeland Life in a case filed by a customer.

The incident brought an ongoing conflict between the directors of the company to light. Later, with the mediation of the regulatory agency, an impartial board of directors was formed with several new directors on November 6.