Photo : Collected
In violation of the Insurance Act, Swadesh Islami Life Insurance Company Limited has borrowed Tk 14 crore 30 lakh by pledging Tk 14.30 crore from its paid-up capital without the approval of the Insurance Development and Regulatory Authority (IDRA).
The information regarding the loan was not disclosed in the company's financial report. After receiving this confidential information, IDRA sent an inspection team to Swadesh Islami Life Insurance, but the company's board did not provide loan details to any of IDRA's inspection teams. Consequently, the company was served a show-cause letter to explain the issue within 30 working days. However, the company's board did not provide any written reply. The violates Section 10(2) of the Insurance Act, 2010.
In light of these violations, on February 12, in a letter signed by IDRA Director (Deputy Secretary) Abdul Majeed, the registration of Swadesh Islami Life Insurance was suspended for the next three months. The letter was addressed to the acting chief executive officer (CEO) and company secretary of Swadesh Islami Life Insurance. The suspension came into effect on January 13.
IDRA Director and Spokesperson Jahangir Alam told The Daily Messenger, “This decision has been taken against Swadesh Islami Life Insurance Company Limited for violating the law and not assisting IDRA.”
Regarding this matter, an attempt was made to contact the acting CEO of Swadesh Islami Life Insurance, Jamal Uddin, via mobile phone, but he did not answer the call.
According to IDRA's letter, the paid-up capital of Swadesh Islami Life Insurance is required to be deposited in a scheduled bank without liability as per Section 21(2) of the Insurance Act 2010. However, the company has taken a loan of Tk 14 crore 30 lakh by putting a lien on the paid-up capital kept in NRBC Bank, which is a clear violation of Section 21(2) of the Insurance Act, 2010.
Such borrowings were not disclosed to the inspecting officers and were not reflected in the company's financial reports. As a result, it appears that embezzlement has occurred.
The letter further stated that on December 4, 2023, a show-cause letter was sent to the company, asking why the registration of Swadesh Islami Life Insurance should not be suspended under Section 10(2) of the Insurance Act 2010. The letter was sent via post (including registry) and through email, providing a 30-day notice period. By January 04, the show cause notice period had expired, but the company did not submit any written reply within the prescribed period.
Meanwhile, on January 04, IDRA asked the chairman and directors of the company to explain why they should not be removed from their positions as per Section 50(1)(b) of the Insurance Act 2010 for taking loans against the interests of the insurer by pledging the company's paid-up capital.
Subsequently, the chairman of the company and the 11 related directors were removed from their respective positions as per Section 50(1)(b) of the Insurance Act, 2010. The remaining five directors of the company were instructed to reconstitute the board. However, the additional managing director and company secretary (Ext. Duties) stated in writing that the directors did not take any initiative.
Considering the overall situation of the company, the registration of Swadesh Islami Life Insurance Company Limited has been suspended for the next three months as per Section 10(2) of the Insurance Act 2010 due to the violation of the provisions of Section 21 of the Insurance Act 2010. This order has been effective from the date of issue.
Messenger/Disha
