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The state-owned Sadharan Bima Corporation (SBC) is not paying Tk 2,575 crore to non-life insurance companies, according to an unaudited report by the Insurance Development and Regulatory Authority (IDRA) for January to December 2023. This report was based on information provided by the insurance companies.
However, SBC claims this information is incorrect. According to the organisation, the amount of outstanding insurance claims from non-life insurance companies to SBC was Tk 574 crore in 2023, compared to Tk 565 crore in 2022—slightly more than the previous year.
Bangladesh Insurance Association (BIA), an organisation of insurance company owners, disputes the information provided by the government institution. According to BIA data, general insurance companies had insurance claims of Tk 1,725 crore from SBC in 2023.
When asked about this, Md.Harun-Or-Rashid, Managing Director of Sadharan Bima Corporation, told The Daily Messenger, “The amount of insurance claims in the First Intimated Survey Report is much higher.”
He explained, “The reason for outstanding insurance claims year after year is the lack of desired cooperation from companies for the settlement of insurance claims. They are unable to submit the necessary documents correctly within the stipulated time. Not receiving the survey report is another major reason. Companies have to be repeatedly urged to submit survey reports.”
He further informed that if the insuring institution does not pay the reinsurance premium on time, it is not possible for SBC to pay the insurance claim. For these reasons, there are delays in settling insurance claims. However, SBC is finalising a guideline to facilitate the settlement of reinsurance-related insurance claims, which will enable quick claim payments.
BIA President Sheikh Kabir Hossain told The Daily Messenger, “This stagnant state of debts and receivables between Sadharan Bima Corporation and companies needs to be resolved very quickly. Everyone should think about making the process as easy as possible.”
For this, he requested the formulation of a policy in coordination with IDRA, BIA, and SBC.
IDRA Chairman Mohammad Jainul Bari told The Daily Messenger, “People insure to mitigate risks. That risk will be mitigated if insurance claims can be settled correctly at the right time.”
He said that for settling all insurance claims, the Fire Brigade report is only needed as proof of a fire accident and is not important for determining the amount of damage. However, in some cases, a Fire Brigade report may be needed to determine fire damage. It is not desirable that insurance claims remain pending year after year for the Fire Brigade report.
Syed Shahriyar Ahsan, CEO of Pioneer Insurance, said that in many cases, SBC returns insurance claims without settling them by delaying. As long as Sadharan Bima Corporation does not give Acceptance, they do not send Debit Notes either, so the company cannot pay reinsurance premiums.
He said another major problem in settling insurance claims is the Fire Brigade report. The Fire Brigade report is not mandatory for settling insurance claims. Companies keep the Fire Brigade report as proof of fire. He informed that there is no need for a Fire Brigade report.
Syed Forhad Abbas Hossain, Deputy Managing Director of Green Delta Insurance Limited, said that Sadharan Bima Corporation can accept the loss adjustment report as proof of how insurance companies are settling insurance claims. SBC can accept physical evidence of whether the Fire Brigade was present at the scene. Collecting the Fire Brigade report has become time-consuming and expensive. He demanded that reinsurance claim payments be made easier.
Imam Shaheen, CEO of Asia Insurance Limited, said that the SBC board's demand for additional documents is responsible for the delay in settling insurance claims.
He said that SBC demands documents that have no relation to existing laws regarding insurance claim settlements. However, foreign reinsurers, with whom Sadharan Bima Corporation also reinsures, pay reinsurance claims based only on survey reports and loss intimated.
Messenger/Fameema
