IDRA gives insurers six weeks to shut duplicate servers, adopts zero-tolerance policy on corruption

Staff Correspondent: Bangladesh’s insurance regulator has given insurance companies six weeks to stop using duplicate servers as part of efforts to improve transparency in the sector.

The Insurance Development and Regulatory Authority (IDRA) has also adopted a “no-tolerance” policy on corruption.

The decisions were taken at a meeting between IDRA, the Bangladesh Insurance Association (BIA) and the Bangladesh Insurance Forum (BIF).

The meeting, held at IDRA’s office on Monday (10 August), focused on problems facing the insurance industry and possible solutions.

IDRA’s newly appointed chairman, Mir Nadia Nivin, chaired the meeting.

BIA Vice-President Kazi Sakhawat Hossain Lintu and BIF President B M Yusuf Ali were among those who attended.

According to the minutes of the meeting, IDRA issued four main directives aimed at improving transparency and discipline in the insurance industry.

Duplicate servers

IDRA said some insurance companies had been using more than one server and providing the regulator with data from duplicate systems.

It said this had raised questions about the accuracy and reliability of information provided by insurers.

All 80 insurance companies have now been given six weeks to stop using duplicate servers and ensure they use a single server.

IDRA said companies found using multiple servers after the deadline could face legal action.

No tolerance for corruption

The regulator has also said it will take a no-tolerance approach to corruption.

Any IDRA employee who asks for or accepts benefits from an insurance company could face action.

Insurance companies could also face action if they offer benefits to employees of the regulator.

IDRA said those found responsible could face administrative and legal measures.

Common rules for financial transactions

Insurance companies currently follow different procedures for financial transactions and signing cheques.

IDRA has asked BIA and BIF to form a joint committee to recommend a common procedure.

The committee has been given two weeks to submit its recommendations to the regulator.

New process for appointing CEOs

IDRA has also proposed a new process for companies that fail to appoint a permanent chief executive within six months of the position becoming vacant.

The regulator would create a pool of qualified candidates and select two names for the company concerned.

The company’s board would then choose one of the two candidates and send the proposed appointment to IDRA for approval.

The meeting also called on insurance companies to act quickly on earlier instructions aimed at increasing the settlement of policyholders’ claims.