28 insurers must get enlisted with capital market by Dec: Mustafa

Staff Correspondent | Published: 00:00, Sep 16,2019 | Updated: 23:45, Sep 15,2019

 
 

A file photo shows the Dhaka Stock Exchange building in Dhaka. Finance minister Mustafa Kamal on Sunday asked 28 non-listed insurance companies to get enlisted with the stock exchanges by offloading shares by three months. — New Age photo

Finance minister Mustafa Kamal on Sunday asked 28 non-listed insurance companies to get enlisted with the stock exchanges by offloading shares by three months.

He gave the directive at a meeting with executives of the insurance companies at his office at the Planning Commission on Sunday.

He briefed reporters after the meeting.  

Mustafa warned that if any insurance company failed to get enlisted with the bourses — Dhaka and Chittagong stock exchanges — by three months, tough action would be taken against it.

He said that initially a temporary ban would be imposed on unwilling companies before taking the tough action.

He, however, did not spell out the tough action.

The number of insurance companies in Bangladesh is 75, of which 47 are listed and 28 are non-listed.

Repeated moves were taken in the past, without any major success, to bring the non-listed insurance companies into the market.

According to the companies law rules, if the paid-up capital of any public limited company exceeds Tk 40 crore, it is compulsory for the company to get enlisted with the capital market within one year.

For banks and insurance companies the deadline for getting enlisted, however, is three years after they become public limited companies.

If any company fails to get enlisted with the capital market within the stipulated timeframe, it can get six-month additional time showing logical grounds.

For violation of this rule, there is a provision to impose a fine of Tk 1,000 a day on the insurance companies.

Mustafa said that the insurance sector was getting stronger day by day as the government had brought the much needed impetus in the sector.

He noted that both insurance and stock market were fundamental components of the economy.

He, however, said that the progress of the country’s insurance sector did not match with the advancement of the gross domestic product.

He said that the insurance companies should prepare separate database for winning the confidence of the clients.

Executives of the insurance companies at the meeting pointed out problems they were facing while running the business.

Last month, the Bangladesh Insurance Association warned its member insurance companies against giving more than 15 per cent of insurance premiums as commission to agents for collecting the premiums.

BIA president Sheikh Kabir Hossain said that the Insurance Development and Regulatory Authority of Bangladesh and the BIA jointly took a number of steps to recover the country’s insurance sector from its current fragile state.

He said that the IDRA and the BIA were cracking down on companies which did not comply with rules and regulations.

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