Regulator fines an insurer

The insurance regulator has fined Republic Insurance Company Tk 2.5 lakh for doing business in credit.
The Insurance Development and Regulatory Authority has settled a claim of nearly Tk 3 lakh for a client of Nitol Insurance, IDRA said in a statement yesterday.
IDRA Chairman Shefaque Ahmed led the hearings attended by members of IDRA and chief executive officers of the insurance companies.
Four branches, two in Dhaka and two in Chittagong and Bogra, of Republic Insurance were fined a total of Tk 2.5 lakh for doing business in credit violating insurance rules.
In another hearing, IDRA asked Nitol to settle claims of Rangdhanu Enterprise in Chittagong worth Tk 2.85 lakh. A fire accident in 2012 caused Rangdhanu Enterprise a loss of Tk 2.85 lakh, but the insurer had dismissed the claim, saying that the client used substandard materials in building its warehouse.
After hearings, IDRA found the claim acceptable and asked the insurer to pay the claim.
IDRA warned the chief executives and branch managers of these companies against violating rules.
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.