HC stays IDRA's suspension
The High Court has extended its stay order by another three months on the insurance regulator's decision to suspend Continental's fire insurance licence.
Earlier in June, the Insurance Development and Regulatory Authority suspended the fire insurance business of Continental Insurance for three months for its failure to settle claims worth Tk 24.46 crore of Khulna-based Jute Textile Mills.
Subsequently, Continental Insurance filed a petition and on June 27 the HC bench of Justice Md Ashfaqul Islam and Justice Mohammad Ali passed a stay order for three months. Later, the petitioner sought an extension to the stay order for another three months as the High Court Division and the Appellate Division of the Supreme Court will be on a 47-day vacation and the stay order will end before the HC reopens on October 1.
On August 12, the HC bench extended the stay order, Barrister Abdus Samad, the petitioner's lawyer, told The Daily Star yesterday.
The annual vacation began on Wednesday.
The court also ordered the IDRA to explain why its decision to suspend the fire insurance business of the petitioner for three months should not be declared illegal.
Jute Textile Mills took a fire insurance policy with the insurer in March 2016 and two months later was met with a fire incident.
The mill owner informed the insurer about the incident and submitted claims for compensation worth Tk 29 crore.
But the insurer did not take the necessary steps to settle the claim, saying that the demand is much higher than the actual loss, which was estimated to be about Tk 13 crore as per a survey report.
Some 19 months after the fire incident, two IDRA-appointed surveyors assessed the losses at Tk 24.46 crore, said Muhammad Nazirul Islam, chief executive officer of Continental Insurance.
Islam said the amount was inflated. “Many documents used in the assessment were fakes,” he told The Daily Star.
The IDRA and Jute Textile Mills also appealed to the Supreme Court to vacate the HC's stay order.
Instead of vacating the HC order, the Chamber Judge has decided to hear the appeal on October 14, according to Samad.
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