Insurance regulator fines Karnaphuli Tk 9 lakh

The insurance regulator has fined Karnaphuli Insurance Company and two of its officials Tk 9 lakh for doing business in credit.

Shefaque Ahmed, chairman of the Insurance Development and Regulatory Authority (IDRA), imposed the fine after a hearing on the issue on last Wednesday, IDRA said in a statement yesterday.

IDRA inspection found that the local branch of Karnaphuli Insurance did business in credit in June, November and December of last year, violating insurance rules.

Of the fine, Tk 6 lakh (Tk 2 lakh for each month) will be paid by the company, while Md Hafizullah, chief executive officer, and AHM Anwar Newaz Khan, local branch manager, will pay Tk 1.5 lakh each, according to the statement.

IDRA also warned the CEO and the manager not to repeat the crime.

A senior IDRA official said though the government enacted a new insurance law in 2010 and gave the authorities adequate control over the errant insurers, the regulator is yet to get sufficient employees to monitor activities of more than 70 companies.

Cashing in on the weaknesses of the authorities, errant insurers have been violating tariff rates, paying illegal commission to clients and making transactions in cash and credit instead of commission, the official said.