HC stays suspension order against Standard Insurance

The High Court on Monday stayed the insurance regulator's decision to suspend the licence of Standard Insurance, clearing the way for the company to operate.

The six-month stay order came after Standard Insurance filed an appeal challenging the order of the Insurance Development and Regulatory Authority that suspended the insurer's licence for three months.

The IDRA found that Standard failed to reinsure its policies worth Tk 46.33 crore. The private insurer claimed that the reinsurance was optional, not mandatory.

“Now there is no bar to running our business,” Amar Krishna Saha, managing director of Standard Insurance, told The Daily Star reacting to the court order.

The court order came as a sigh of relief to more than 400 employees of the company as they will get salaries and bonuses ahead of the Eid-ul-Fitr, he said.

The IDRA had instructed the private insurer not to issue cover notes or insurance certificates. The company was also banned from getting involved in new business activities during the suspension period effective on June 21.

The regulator asked the company to explain within 30 days why its licence should not be revoked. Standard Insurance can seek an appearance before the IDRA if it wishes, the regulator said.

“We are working to respond to the IDRA's letter,” Saha said.

But the regulator will not let the insurer go easily, according to a senior official at IDRA.

“We will appeal against the stay order, but we are yet to get the details of the order,” an IDRA official said.

Standard was incorporated as a public limited company in November 1999 under the Companies Act 1994 and was registered under the Controller of Insurance in December 1999 under the Insurance Act 1938.

Standard Insurance is listed on the Dhaka and Chittagong stock exchanges, and its shares traded at Tk 18 in Dhaka on June 21, which went down to Tk 16 yesterday.