![Non-life insurers owe Tk 1,637cr to SBC Non-life insurers owe Tk 1,637cr to SBC](https://www.dailymessenger.net/media/imgAll/2024February/en/2-2407260148.jpg)
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The non-life insurance companies of the country are not paying Tk 1637 crore to the government insurance company Sadharan Bima Corporation (SBC). SBC is supposed to receive this money from non-life companies as reinsurance premium. This information was obtained from the Insurance Development and Regulatory Authority (IDRA).
According to the unaudited financial report, from January to December 2023, SBC is owed Tk 1637 crore from all non-life insurance companies in the country. This amount was Tk 778 crore in 2022. In other words, the receivables increased by Tk 859 crore in 2023 compared to 2022, or more than doubled.
According to the Bangladesh Insurance Association (BIA), the organisation of insurance companies, in 2023, insurance companies owe Tk 1009 crore to SBC. However, SBC claims that insurance companies owed Tk 1,321 crore. In the previous year 2022, it was Tk 1169 crore.
SBC says that reinsurance is an important aspect in the non-life insurance sector. SBC is the only reinsurance institution in Bangladesh's insurance sector. According to the Insurance Corporation Act, all insurance institutions are obligated to reinsure 50 percent of their reinsurable portion with Sadharan Bima Corporation.
For this reason, a complexity is arising regarding the outstanding reinsurance premium and outstanding insurance claims amount from all non-life insurance companies to Sadharan Bima Corporation. Insurance industry stakeholders claim that this crisis needs to be resolved for the progress of the insurance industry.
Regarding the overall situation, Md. Harun-Or-Rashid, Managing Director of Sadharan Bima Corporation, said that this money cannot be collected due to the lack of goodwill from the insurance companies.
Mohammad Jainul Bari, Chairman of IDRA, the guardian of insurance companies, told The Daily Messenger, “People get insurance to mitigate risks. That risk mitigation will happen if insurance claims are settled correctly and on time. From the information provided by the companies, it's seen that they are not paying the money owed to SBC. As a result, SBC is also reducing insurance claims.”
He said that meetings have been held with the MDs of the companies regarding the payment of SBC's receivables and the companies' receivables from SBC. In the meeting, IDRA gave several directives to the companies. These include - conducting reinsurance activities according to insurance laws, rules, regulations, and circulars.
SBC will create a policy by September 2024 for collecting reinsurance premiums from contracted insurers and settling reinsurance claims. It will create a checklist of necessary documents for reinsurance claims from SBC. Insurers and reinsurers must mandatorily comply with insurance and reinsurance contracts.
SBC and other insurance companies will finalize the accounts of reinsurance-related debts, receivables, outstanding premiums, and outstanding insurance claims by September 30 and must reach a consensus.
PK Roy, Advisor to Rupali Insurance Company Limited, said that if Sadharan Bima Corporation sets a deadline for premium payment and companies pay the premium within that time, there should be no problem for SBC to pay insurance claims. If insurance claim money is paid, companies will also quickly pay the premium money.
Nasiruddin Ahmed Pavel, First Vice President of Bangladesh Insurance Association, said that the way Sadharan Bima Corporation is settling insurance claims as a reinsurance institution is not regulated by any law.
Md. Imam Shaheen, CEO of Asia Insurance Limited, said that in reality, companies will receive even more money from SBC than what SBC is claiming as receivables. If SBC properly pays the insurance claim money, insurance companies will be more motivated to pay the premium money.
Messenger/Fameema