Insurers agree not to give over 15pc commission

General insurance companies have decided not to provide over 15 percent commission to agents to comply with a regulatory notice issued in 2012. Moreover, they would also stay vigilant to ensure that the peers are compliant.

The decisions came in a meeting of Bangladesh Insurance Association (BIA) at Dhaka Club on Saturday night, when CEOs and chairpersons of all the companies were present.

Sheikh Kabir Hossain, president of the BIA, chaired the meeting. The Insurance Development & Regulatory Authority (Idra) had issued the notice against the backdrop of some insurers going as far as to offer 60 percent.

When compliant insurers refuse to pay such amounts, parties go to others without considering the risks.

The regulator recently decided to clamp down on the practice for the sake of the sector. This prompted the BIA to sit together and settle on implementing the decision.

Hossain said the insurance sector has been suffering from an image crisis and the insurance companies would have to work together to clear their names.

“So we will not provide higher commissions and we will stay alert so that everyone implements it,” he said.

The association also decided to bar non-life insurers from employing anyone on the basis of commissions. Those that already have such staff would have to part with them by Wednesday. The insurers will provide commissions only to licensed agents of the Idra.

It also decided that chiefs of insurance companies would immediately convey the decisions to branch in-charges.