Photo : Messenger
The Jamuna Life Insurance Company Limited has been found engaging in fixed deposit (FDR) operations akin to banking activities, albeit with the approval for insurance business, as revealed in the investigation report by the Insurance Development and Regulatory Authority (IDRA).
The IDRA investigation team uncovered this evidence while probing complaints from 93 customers in the bustling commercial hub of Chattogram. These complaints allege that customers invested money under the guise of FDR. However, some customers only received partial interest payments, with discrepancies noted in the number of installments paid.
Presently, the company authorities are refuting claims of insuring FDR accounts, despite the evidence suggesting otherwise. As per the Insurance Act, only companies sanctioned by the Insurance Development and Regulatory Authority (IDRA) are authorised to conduct insurance-related activities. Furthermore, engaging in fixed deposit (FDR) or cooperative business is strictly prohibited under this regulation.
Despite these clear guidelines, officials of the company illicitly collected around 3 crore taka from customers under the guise of FDR at the Chattogram branch. Shockingly, it appears that both the officials of the Chattogram branch and the main branch collaborated in this unlawful activity.
The admission of guilt by the company's Chief Executive Officer (CEO), Kamrul Hasan, underscores the severity of the situation, implicating high-level involvement in the illegal operation.
He said that some officials of the company have cheated the customers, they took the money from the customers and got the policy in the name of 'FDRA'. As per rules we insurance companies cannot do any FDRA. A case has been filed against those involved in this act.
In the investigation report, why is any action being taken even after getting the insurance company's 'FDRA' business? IDRA Chairman Mohammad Zainul Bari refused to comment when asked. IDRA director Abdul Majeed headed the three-member investigation team. And two members were Sohail Rana and Tanjid-ul-Islam.
Upon reviewing the investigation team's findings, it appears that there are discrepancies between the company's assertion and the actual number of policyholders involved. While the company claimed that there were only 75 policyholders, citing multiple listings of the same individual's name, the evidence provided by the investigation team suggests otherwise.
For instance, Nawazul Ansari's case highlights this discrepancy. Despite being listed multiple times in the complaint roster, he presented four distinct policy documents to the inquiry committee. This contradicts the company's claim and underscores the need for a thorough examination of all complaint listings to accurately determine the total number of affected policyholders.
According to the company's stance, customers did indeed purchase insurance policies, and no Fixed Deposit and Recurring Account (FDRA) transactions were conducted. The company alleges that complainants misrepresented the transactions as FDR to extract money from customers. Sajjad Hossain Chowdhury, one of the complainants, claimed that customers were informed about FDR through verbal instructions from the Company's CEO, AMD Jasim Uddin, and SAMD Rabiul Islam.
Furthermore, the mention of FDR in circular 45/2025 issued by the company adds complexity to the situation. It suggests that there may have been some form of acknowledgment or authorisation of FDR-related activities within the company's internal documents.
The responsibility of the company's management authority extends to overseeing all activities, scopes of work, and business operations of its employees. This underscores the need for a thorough investigation into the alleged involvement of senior management personnel in the FDR-related activities.
The company's statement that the complainants have single-handedly taken the money from the customer by breaking the name of FDR is proved to be illogical. Because the circular signed by the CEO of the company mentions FDR in 45/2020.
On the other hand, the complainants Sajjad Hossain Chowdhury, Misir Raihan and Atiqur Rahman are the development officers of the company, they should have done only the bank can do FDR, the insurance company can not do FDR but can accept the insurance risk. In this case, they cannot avoid the responsibility of depositing as a company by accepting money from the customer by talking about FDR.
The mention of Fixed Deposit and Recurring Account (FDRA) in notification 45/2020 issued by the company raises significant concerns. Typically, the role of FDR involves assuming insurance risk, a function that should squarely belong to the insurance company. This fundamental understanding of general insurance principles should be well-known to the CEO of the company.
However, the fact that the CEO issued circular 45/2020 referring to FDR poses a legal quandary. Legally, the CEO should not be endorsing or promoting activities that could potentially create opportunities for fraudulent behavior.
It's essential to scrutinise the circumstances under which this circular was issued. If the circular was issued without due diligence or proper understanding of its implications, it could indeed create opportunities for fraudulent activities within the company. Therefore, a thorough investigation into the motives behind issuing this circular is warranted to address any potential breaches of legal and ethical standards.
The review of the policies held by the company reveals a concerning pattern: despite policies being sold in 2020 and 2021, none of them are currently in service. This raises red flags regarding the legitimacy and effectiveness of the policies sold by the company during these periods.
It's reasonable to expect that if the policies were indeed tailored to meet the customers' wishes and needs, a significant portion of them would be actively in operation. However, the absence of any policies in service suggests a potential discrepancy between what was promised to customers and what was actually delivered.
The case of Nawazul Ansari further highlights these discrepancies. As a coaching teacher, his profession suggests a modest income level. Yet, he holds a total of five policies, for which he has paid a staggering amount of Tk 31,00,000. Such a substantial premium payment, totaling Tk 30,10,000 annually for five policies, appears highly implausible given his profession and income level.
This raises serious questions about the sales practices and financial feasibility of the policies offered by the company. It warrants a thorough investigation into the sales process, the representations made to customers, and the overall integrity of the company's operations.
The statement provided by customer Md Nawazul Ansari, indicating that he deposited all his savings with the company for FDRA rather than for policies, has been corroborated by evidence. Furthermore, similar statements made by other customers, including Sajjad Hossain Chowdhury, Misir Raihan, and Atiqur Rahman, further support the narrative that customers were misled into depositing money under the guise of FDR rather than purchasing insurance policies.
Additionally, the acknowledgment by the company's Assistant Managing Director (AMD) Jaseem Uddin and Senior Assistant Managing Director (SAMD) Rabiul Islam of accepting money from customers under the pretense of FDR reinforces the credibility of the customers' claims.
The case of Sohail Rana presents another troubling instance of potential fraud and deception within the company. Despite being a customer who provided feedback firsthand, Mr. Rana's experience raises serious concerns.
As a member of the army, Mr. Rana entrusted Sajjad Hossain with Tk 6,00,000 for an FDR. Subsequently, he purportedly received a profit of Tk 3,23,400 under the guise of FDR. However, upon closer inspection, it was discovered that instead of FDR, an insurance policy was opened in Rana's name.
Moreover, when Jubair, a former accountant of the Chattogram Model Service Center, examined the policy, he found discrepancies and falsifications. The pay bills and medical certificates contained within Rana's policy file were deemed incorrect and fraudulent.
The company's assertion that it did not pay the profit to customer Sohail Rana and that it cannot make cash payments is refuted by the evidence presented. However, it's notable that even if the company indeed paid the profit to Mr. Rana, the method of cash payment raises serious concerns regarding transparency and legality.
Moreover, the suggestion to issue a commission payment circular for FDRA transactions, even if it is illegal, highlights a troubling disregard for regulatory compliance and ethical standards. Such actions could further exacerbate the company's legal liabilities and undermine public trust in its operations.
Based on the comprehensive review conducted, it appears evident that all 93 customers listed were engaged in Fixed Deposit and Recurring Account (FDRA) transactions, with funds credited to the company. Given this finding, it seems reasonable and fair for the company to refund the money to all 93 customers. Failure to do so could have detrimental effects on the insurance industry of Bangladesh, potentially eroding trust and confidence among consumers.
Additionally, considering the seriousness of the situation and the potential financial losses suffered by the customers, it is prudent to pursue legal action against those involved in the incident. This includes individuals within the company who may have orchestrated or facilitated the fraudulent activities. Holding these individuals accountable through legal proceedings not only serves to deliver justice to the affected customers but also sends a strong message regarding the consequences of unethical behavior within the insurance industry.
Messenger/Sajib
