Rules take effect to streamline hiring of insurance agents
Bangladesh's insurance industry has taken a major leap forward after the government enacted a rule to streamline the hiring and licensing of agents, who are the driving force of a sector grappling with irregularities.
The financial institutions division of the finance ministry published the gazette of the Insurance Agent (recruitment, registration and licence) Regulations-2021 on November 14. It came into effect immediately.
In order to become an agent, an applicant has to be at least 18-year-old and have a minimum educational qualification of the Secondary School Certificate or equivalent examination. However, the provision will not be applicable to those who were licensed as agents before the publication of the gazette.
The agents have to have a proof of attending training for 72 hours, said the rule.
In order to receive the licence to work as an agent, the applicant must submit certificates to show that they have opened at least 11 new policies every year, earned a commission of Tk 20,000 against the collection of new premiums, and the tax at source on the commission has been deducted by the insurer.
In the case of a non-life insurance agent, the individual must submit certificates as a proof that they have raised a premium of at least Tk 1 lakh while working as a temporary agent, and the tax at source was deducted by the insurer.
The tenure of the licence issued by the authority will be three years, said the rule.
The rule orders agents to give accurate information about insurance plans to potential policy-holders and bans them from providing any exaggerated or false information to the clients.
They have been asked to help clients to deposit the premiums through the banking system. Agents can't accept the premiums in cash, according to the rule.
Experts and industry people welcomed the rule.
Prof Md Main Uddin, chairman of the Department of Banking and Insurance at the University of Dhaka, said: "The main purpose of the rule is to popularise insurance and make all insurance companies sustainable."
"There are many irregularities in the insurance sector. As a result, many companies have lost the trust of the ordinary people."
Sheikh Kabir Hossain, president of the Bangladesh Insurance Association, said the government had enacted the regulations in the interest of the insurance sector.
A senior insurance agent of a life insurance company said it was good to set the qualifications.
"We try to hire people as agents who have at least completed graduation because an educated person will be in a better position to promote the company and sell policies."
There are 32 life insurance companies and 46 non-life insurance in Bangladesh. They have covered 1.7 crore people through around 15 lakh agents.
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