The New Nation - Internet Edition

Staff Reporter

Commerce Adviser Dr Hossain Zillur Rahman yesterday said that the importance of insurance business is assuming a new dimension with the rapid growth of the country's economy.

"As economy is growing, so is the risk in different forms, he said at a discussion meeting with the leaders of the Bangladesh Insurance Association (BIA) in the city.

He laid stress on giving importance on risk management saying that the cliental base of insurance companies is expanding steadily.

He said in SIDR affected areas there were many shrimp farms.. The devastating cyclone washed away many of them causing huge losses to owners of shrimp enclosures. They could recover much of their losses if they had insurance coverage, he noted.

Besides, a lot of foreign investment is coming to Bangladesh, which needs risk coverage, he mentioned.

The Adviser assured the insurance leaders that the proposed Insurance Regulatory Authority Act, the Insurance Act and the Takaful Act will take a concrete shape soon.

He informed that the government is considering holding of an economic conference in the gulf region for increasing remittance inflow.

BIA president AKM Rafiqul Islam told the meeting that the 60 private insurance companies have earned Tk 25,539 million in premium in 2005 and Tk 32,571 million in 2006. The private insurance companies paid the government Tk 490 million as Income tax and Tk 750 million as VAT in 2006.

He pointed out that the sector has been facing numerous problems which hindering growth of the industry. He said the insurance sector is still running under the Insurance Act of 1938, which need to be amended. He further said the general insurance companies are being forced to do 50 per cent reinsurance with the state owned Sadharan Bima Corporation (SBC). He urged the Adviser to bring down the stake to less than 10 per cent for the betterment of the sector.

The BIA president said the SBC is delaying settlement of longstanding claims of nearly 400 policies leaving Tk 2,290 million piled up with the state owned concern.

He also urged the government to reduce the corporate tax for the insurance companies.

Former BIA president Nasir Chowdhury and ALICO representative Nurul Islam also spoke on the occasion.