The Bangladesh Insurance Association (BIA) has sent a letter to the Secretary of the Financial Institutions Department of the Ministry of Finance, Sheikh Mohammad Salim Ullah, to temporarily suspend the work of issuing the notification so that the much awaited ‘bancassurance policy’ is not implemented.
The BIA sent this letter two days after the Financial Institutions Department approved the policy and sent it to Bangladesh Bank Governor Abdur Rauf Talukder. The letter signed by BIA president Sheikh Kabir Hossain said, ‘BIA thinks that some aspects of bancassurance policy need to be amended.’
The letter also said, ‘The matter of telephone conversation with you is memorable. The chairman of the Insurance Development and Regulatory Authority (IDRA) has also had a telephone conversation in this regard.’
Meanwhile, yesterday, Sheikh Kabir Hossain sent a letter to the chairman and chief executive officers of all insurance companies in the country. In the letter, he said, the BIA has come to the notice of the approval of the Bancassurance Policy which has been sent to the Governor of Bangladesh Bank. Immediately there was a phone conversation with the Secretary of the Financial Institutions Department and the Chairman of IDRA. They agreed to the request for temporary suspension of the notification.
Sources said that the Financial Institutions Department is now silent due to the fear that the notification will not be issued despite the formulation of the policy. His Private Secretary (PS) Shihab Uddin Ahmed told Prothom Alo that Secretary Sheikh Mohammad Salim Ullah would not talk about this at the office of the Financial Institutions Department yesterday afternoon.
Besides the Bancassurance Policy, the Financial Institutions Department also approved the ‘Corporate Agent (Bancassurance) Guidelines’ last Tuesday. However, BIA did not say anything about this.
However, despite BIA’s opposition, Bangladesh Bank’s Executive Director and Spokesperson Mejbaul Haque told Prothom Alo on Wednesday, “If the Financial Institutions Department has sent a letter, then we will issue the notification.”
As per approved policies and guidelines, bancassurance will be implemented mainly through branches of banks in the country. In other words, the bank will work as a corporate agent or representative of the insurance company. Bancassurance can be a place of people’s trust as people’s confidence in the insurance sector is relatively low. For this, customers do not have to go to the insurance company, just go to the bank branch. That is, the bank will sell insurance products as well as banking products to its own customers. Notable among the products are pension, health, accident, dowry, education, Umrah Hajj etc.
According to the policy and guidelines, only banks and financial institutions under the control of Bangladesh Bank can be agents of bancassurance. For that they have to contract with the insurance companies. However, no bancassurance agent can associate with more than three insurance companies. For this, the insurance company has to get approval from IDRA and bancassurance agent from Bangladesh Bank.
IDRA Chairman Mohammad Zainul Bari told Prothom Alo yesterday, ‘There may be some problems at the implementation stage of the issue. That’s why we’re going a little slower.’