Insurance sector

Published:  05:41 AM, 18 October 2020

What is going on?

Ordinary people pay insurance premiums to get monetary help from insurance companies in times of distress but allegations show that in most of the cases the insurance clients get deprived of proper service from insurance companies. In many cases it happens that policy-holders cannot continue to pay premiums after three or four years. Most of the insurance companies in such cases do not pay back a single penny to their clients which is how a big scale of corruption and irregularities are going on in the insurance sector.

If people deposit money in banks, they can withdraw it anytime but in most of the cases policy-holders of the insurance companies cannot get their money back when it is needed most or when the policy is expired.Reportedly around 33 percent life insurance claims in Bangladesh remain unsettled due to weak financial health and absence of good governance. This is how people's confidence on the insurance sector goes down.

Allegedly one of the top officials of a leading and old insurance company embezzled a huge sum of money by unlawfully cashing reinsurance cheques during the years  2015-2016 and 2017-2018. Reliable sources have informed that this matter was notified to Finance Ministry, Financial Institutions Division and Insurance Development and Regulatory Authority (IDRA).Of the total insurance claims of Tk 2,760 crore of the 32 life insurance companies as of September 2020, 67% were settled.The remaining claims of Tk 914 crore are still unsettled.

If someone opens a Deposit Pension Scheme (DPS), when the policy will be matured, he or she will get double return against the deposited money--through such lucrative offers different insurance companies are enticing people to open DPS with them. Though city dwellers hardly open DPS in an insurance company, people living outside Dhaka easily become attracted to these deals.

As a result thousands of poor people of village areas who live from hand to mouth deposit their savings to different insurance companies. While some people get benefit from such schemes, a large number of people do not even get back their savings let alone the interests.A lot of people are not even getting health coverage from some insurance companies during the ongoing Covid 19 pandemic.

Sometimes if the depositors want to close their scheme before the prefixed time, insurance companies charge unbelievable amount of penalty fee. Most of such fraudulent activities of insurance companies remain unpublished in media and only a few examples of cheating come into limelight. There are allegations that some insurance companies don't monitor the activities of their local agents properly.

As a result, initially they convince people to open scheme and deposit money in their companies, but some years later they move away from the areas and their office disappears overnight. And the frauds do such activities in the name of many reputed insurance companies, but those companies do not compensate their depositors though the depositors have legal documents.

When this type of incidents happen to the working class people, who save their hard-earned money with a dream to do something, it just ruins their future leaving them in a hopeless state. A large number of rural people in Bangladesh have been going through such terrible incidents due to unethical practices of different insurance companies. But neither the insurance companies nor the government is looking after these occurrences and no actions are being taken against the perpetrators.

Deposit Pension Scheme (DPS) is a common and most profitable business instrument of insurance companies in Bangladesh. The astonishing fact is that though existing insurance law does not allow insurance companies to include DPS in the list of their policies but every company has been offering it over the years. Like DPS most of the insurance companies of Bangladesh follow many other immoral, illegal and deceptive ways for earning more money.

Some insurance companies harass the policy-holders or sometimes the dependents of the policy holders when they claim their deserved money after maturity or death of the policy-holder. Some insurance companies show different excuses in order to make delay in paying back the claimed money. Sometimes insurance officials try to pay less than the desired amount by creating untoward circumstances.

Dr. Ashraf Uddin, Executive Director of Delta Life Insurance Company Limited said to The Asian Age, "We always make the best of our efforts to settle insurance claims within a short time. Sometimes people do not submit the required papers which leads to delay in claim settlement. We also take necessary measures if any anomalies are reported."

BM Yusuf Ali, Managing Director and Chief Executive Officer (CEO) of Popular Life Insurance Company Limited told The Asian Age, "We are very much dedicated to our clients. We try our best to solve insurance claims at our earliest convenience."

Bangladesh Bank's former Deputy Governor Khandaker Ibrahim Khaled said to The Asian Age, "The government and the regulatory authority should establish good governance and accountability in the insurance sector. Insurance claims by clients should be examined and solved rapidly."

Professor Anu Muhammad, Jahangirnagar University, told The Asian Age, "A lot of disorder, corruption and irregularities are going on in the financial sector of Bangladesh including insurance companies. However, it cannot be said that all insurance companies are corrupted. The government should ask the insurance companies to come up to cooperate with people immediately during this coronavirus pandemic."

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