Regulator to probe Standard Group's insurance scandal
The Insurance Development and Regulatory Authority (IDRA) yesterday formed a three-member panel to probe the alleged irregularities in insurance claims on the gutted garment units of Standard Group, the
regulator said in a statement.
The committee was formed after a news report revealed that Standard Insurance, a sister concern of Standard Garments, fabricated insurance policies to inflate claims, it said.
Standard Insurance included an additional Tk 100 crore in claims without taking any policy coverage from Standard Garments, which is a gross violation of the law, according to the documents scanned by The Daily Star.
A senior executive officer of IDRA will head the probe committee that includes two other officers. The committee will work under the supervision of AKM Iftekher Ahmed, senior consultant at IDRA.
The committee will assess the insurance policies, reinsurance, claims and survey reports and submit its report to the acting chairman of IDRA by March 31, according to the statement.
Standard Garments faced a devastating fire on November 28 last year that, according to owners, caused them a loss of Tk 1,202 crore.
Against 17 policies, Standard Group submitted claims worth more than Tk 454 crore to Standard Insurance for the damage. The insurer helped the company inflate the claims.
Another Tk 34.5 crore in facultative insurance, which is an excess amount of the monetary limits of their reinsurance treaties with Sadharan Bima Corporation (SBC), was shown without the insurer giving any premium to the reinsurer.
Reinsurance helps an insurance company reduce the risks by spreading them across alternative institutions. State-owned SBC is the reinsurer here.