Delta Life to appoint US actuary firm to assess health
Delta Life Insurance is going to appoint a foreign actuary firm to get an independent assessment of the health of the insurer, which came into the spotlight for breaching rules and making bribery allegation against the head of the industry regulator.
After appointing an administrator in the company, the Insurance Development and Regulatory Authority (IDRA) ordered special audits into Delta Life Insurance to ascertain the authenticity of allegations from stakeholders.
The auditors earlier found that the company was in breach of several regulations and that further investigation was required.
"We will appoint a top actuary firm from the US as Bangladesh has few actuary firms," said Sultan-ul-abedin Mollah, administrator of Delta Life Insurance.
The IDRA appointed Mollah as the administrator on February 11 to protect policyholders' interests and submit a report on the company's situation within four months.
The appointment came after special and investigative audits unearthed breaches of regulations by the insurer.
Earlier, Delta Life Insurance accused IDRA Chairman M Mosharraf Hossain of seeking Tk 50 lakh in bribes for giving approval to the reappointment of the company's chief executive officer and renewing the actuarial valuation basis.
The insurer complained against Hossain with the Anti-Corruption Commission (ACC) on December 7, 2020. On December 9, it sent another letter to the commission, alleging that he demanded the bribe.
Delta Life presented the recordings of phone calls and the audio clip to the commission in support of the allegation.
"As this is an unusual circumstance and we have obligations of running legal issues of the company as well as continuing core businesses, it takes time to appoint auditors," the administrator said.
"We formed a committee to unearth the truth of the allegations made by the company against the IDRA chairman," Mollah said.
In a letter to the ACC on February 17, Pallab Bhowmik, a joint executive vice president of the insurer, said he was forced by the former CEO of Delta Life to complain to the ACC.
He also sought withdrawal of the allegation. "I know nothing about the audio clips," he said in the letter.
"We told the official to withdraw the allegation and he has already done it," Mollah told The Daily Star
ACC Spokesperson Pranab Kumar Bhattacharjee confirmed that the commission received a bribery allegation from Delta Life. "The ACC is yet to decide whether it will investigate the issue," he said.
He was unaware of any letter sent by Delta Life seeking withdrawal of the complaint.
"The ACC will decide whether it will continue the process or halt it," Mollah said.
A former director of Delta Life Insurance, preferring anonymity, said that the audio clip proved many things.
Delta Life Insurance sent two audio clips to the ACC containing a conversation between an official of the company and the IDRA chairman.
Bhowmik filed the allegation in line with a decision of the audit committee of the board, so the official is not a big issue here.
"I hope the ACC will look into it," he added.
When an allegation is submitted, its cancellation is up to the commission, and it might not change even after a letter from an applicant, said a top official of the ACC.
Mollah said he wanted to portray a fair and accurate picture of the company through the auditors as ordered by the IDRA.
"We are now checking previous reports that were submitted by the auditors appointed by the IDRA," he said, adding that they are careful about keeping the business unscathed.
The IDRA ran a special audit through Howladar Yunus & Co in 2019 and then an investigative audit through Fames & R Chartered Accountants to verify allegations from shareholders and policyholders.
"On the basis of Delta's response to audit objections, we found that there were breaches of rules and regulations in at least 22 ways," the IDRA said in a show cause notice.
In some cases, the company's answers were not acceptable to the auditor. In cases where the company did acknowledge the breach of rules, there were no statements on when and how it will be corrected, the notice said.
Fames & R Chartered Accountants traced 25 specific areas through which the interests of policyholders were impacted. It recommended carrying out the further probe.
Meanwhile, the VAT Audit, Intelligence and Investigation Directorate filed a case against Delta Life, alleging that it had evaded Tk 35.18 crore in VAT.
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