The
government guidelines for formation of an insurance company:
1.
The intending
sponsors must first submit an application in prescribed form to the Chief
Controller of Insurance for prior permission.
2.
After necessary
scrutiny the Chief Controller shall forward the application with his
recommendation to the Ministry of Commerce.
3.
After further scrutiny, the Ministry of
Commerce shall submit its views to the Cabinet Committee constituted for this
purpose.
4.
The decision of the
Committee, if affirmative, should be sent back to the Ministry of Commerce
which in turn should send it back to the Chief Controller of Insurance for
communicating the same to the sponsors.
5.
The sponsors would
then be required to apply in a prescribed form to the Registrar of Joint Stock
Companies to get registration as a public liability company under the Companies
Act. Memorandum and Articles of Association duly approved by the Controller of
Insurance would have to be submitted with the application.
6.
Once the registration
process was completed the sponsors would have to obtain permission of the
Securities and Exchange Commission to issue share capital.
7.
Reinsurance arrangements would have to be made
at this stage.
8.
After all the above
requirements were fulfilled the license to commence business under the
Insurance Act 1938 is to be obtained from the Chief Controller of Insurance.
Application can only be made subject to government announcements in this
regard.
The control over insurance
companies, including their functions relating to investments, taxation, and
reporting, are regulated mainly by the Insurance Act 1938 and the Finance Acts.
The privatization policy adopted in the 1980s paved the way for a number of
insurers to emerge in the private sector. This resulted in a substantial growth
of premium incomes, competition, improvement in services, and introduction of
newer types of business in wider fields hitherto untapped. Prior to
privatization, the yearly gross premium volume of the country was approximately
Tk 900 million in general insurance business and approximately Tk 800 million
in life insurance business. In 2000, premium incomes rose to Tk 4,000 million
in general insurance business and Tk 5,000 million in life insurance business. Up
to 2000, the government has given permission to 19 general insurance companies
and 10 life insurance companies in the private sector. Insurers of the country
now conduct almost all types of general and life insurance, except crop
insurance and export credit guarantee insurance, which are available only with
the SadharanBima Corporation. Numerous institutions, associations and
professional groups work to promote the development of insurance business in
Bangladesh. Prominent among them are the Bangladesh Insurance Association and
Bangladesh insurance academy. Bangladesh Insurance Association was formed on 25
May 1988 under the Companies Act 1913. It is registered with the Registrar of
Joint Stock Companies and has 30 members. It aims at promoting, supporting and
protecting the interests and welfare of the member companies. Surveyors and
insurance agents occupy a prominent position in the insurance market of
Bangladesh. The surveyors are mainly responsible for surveying and assessing
general insurance losses and occasionally, for valuation of insurance properties,
while the agents work to procure both life and general insurance business
against commission. The system of professional brokers has not yet developed in
Bangladesh. However, it is a common practice of the insurers to engage salaried
development officers for promotion of their insurance business. In present
insurance is too much important to the business and individual sector. Mostof
the companies provide more or less same services. For this reason the
competition is increasing day by day between the insurance companies. On the
other hand some new insurance companies are going to start businesses in the
competent market. BGICneed to develop their some productive sectors. In
present, a company cannot establish properly without developing
information technology. People search their desires
requirement through Internet so, insurance companies need to develop Web
address to increase both foreign and local investors. So we have discussed about both the problem and prospects of insurance business in Bangladesh. The progress of insurance business depends on the progress of economic condition .Insurance business
also faces many problem. So if we develop economic condition as well as overcome
the problems, it will help a lot to flourish this business in our country.