Bangladesh Bank Governor Dr Ahsan H Mansur has said that sustainable development in the insurance sector is not possible without the effective implementation of good governance.
He noted that the sector is subject to strict governance requirements, leaving no alternative but to ensure full compliance.
The governor made the remarks on Monday while speaking as the chief guest at the launch of the new website and the Digital Insurance Manual of the Insurance Development and Regulatory Authority (IDRA) at the BIAM Foundation auditorium in the capital, according to a press release.
Dr Mansur said that although investments have been made and premiums collected in the insurance sector, policyholders’ claims have not been settled in many cases. These liabilities could not be met due to inadequate funds. He instructed chief executive officers (CEOs) and chief financial officers (CFOs) of insurance companies to manage funds properly and responsibly.
He said that regulators, insurers and all market participants have their respective responsibilities. While the market may move at its own pace, it cannot be allowed to operate in a completely unregulated manner. Effective oversight and accountability must be ensured.
Describing Bangladesh’s insurance sector as still relatively small, the governor said the government needs to play an active role in market expansion. Without expanding the market, the country’s gross domestic product (GDP) will also remain limited.
He further said that digitisation in the insurance sector is critically important. Digital operations will be hampered if insurers fail to input information through the new website. He also emphasised reducing cash transactions and promoting cashless payments. To this end, IDRA will formulate guidelines to facilitate premium payments through banks.
The event was chaired by IDRA Chairman Dr M Aslam Alam. He said the Digital Insurance Manual has brought together all insurance-related laws, rules, regulations and circulars in one place, which will help enhance transparency and accountability in the sector.
He added that IDRA is working on legal, digital and institutional reforms, with the Digital Insurance Manual being a key part of that reform process. If the reforms are implemented effectively, the insurance sector will make significant progress over the next five years; otherwise, existing problems will become more complex.
Speaking as a special guest, Bangladesh Insurance Forum President BM Yousuf Ali said that insurance companies’ funds are deposited with banks and urged the governor to ensure that no company fails to settle claims due to a shortage of funds. He also praised the reform initiatives taken by the current IDRA leadership.
Bangladesh Insurance Association Vice-President Kazi Sakhawat Hossain Lintoo said the Digital Insurance Manual is an important milestone for the insurance sector and will serve as an effective tool for all stakeholders involved in insurance business operations.
