What is in the new insurance corporation law 2022 - Insurance stock price 2022

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The Insurance Corporation Act 2018 has been approved in the cabinet meeting. The law was approved at the last cabinet meeting of the current government on Monday (December 3rd). Naturally, the question arises, what is in the new insurance corporation law?


It is learned that after the independence of Bangladesh, the insurance sector of the country is being managed with the 'Insurance Corporation Act 1973' enacted in 1973. However, the present government repealed The Insurance Act 1936, enacted in 1936 to modernize the Insurance Act after taking office in 2009, and enacted the Insurance Development and Regulation Authority Act 2010 to establish a regulatory authority to oversee the country's insurance business. . country's insurance sector has been running with this law for so long. Therefore, there is a need for a new law, which was approved by the cabinet on December 3.


It is learned that the Department of Financial Institutions under the Ministry of Finance has coordinated with the two newly enacted laws and presented the new ‘Insurance Corporation Act 2018’ for cabinet approval for the purpose of converting the law from English to Bengali.


According to the Financial Institutions Department, a draft of the law was approved in the cabinet meeting held on November 9, 2015. The proposed law has 33 sections. Significant changes have been made in the Act with the repeal of the Insurance Corporation Act 1973:

Sections 3, 14, 14A, 24, 26, and 32 of the Insurance Act, 1973 have been omitted in the new Act for unnecessary consideration in the present context.


The amount of authorized and paid up capital of the Life Insurance Corporation under the Insurance Act of 1983 was Tk. 20 crore. The new law has changed the authorized capital to Tk 300 crore and the paid-up capital to Tk 30 crore. Similarly, in the case of General Insurance Corporation, the authorized capital has been fixed at Rs. 500 crore and the paid-up capital has been fixed at Rs. 100 crore. This will expand the amount of capital of both corporations.


The Board of Directors of both the Corporations (Life Insurance and General Insurance) has been increased from 6 to 10 persons to facilitate the inclusion of persons with experience in different classes and professions. The quorum number has also been increased due to the increase in the number of directors on the board. The new law states that a minimum of five members will be required for a meeting of the corporation's board of directors, whereas the previous law had a quorum of three.


The section on qualifications and disqualification of directors has been restructured by adding necessary provisions to bring good governance in the management of the corporation and ensure the professionalism of the board members.


The new law changes the existing clause for insuring government property. The 1973 Act made it compulsory to ensure 50 percent of government property with a general insurance corporation or other insurance company. According to section 16 (1) of the new law, 100 percent of government property will be insured by the general corporation and the remaining 50 percent will be distributed equally among all the private insurance companies. This system is currently in operation as an MoU signed between the General Insurance Corporation and all other private insurance companies in 1990 under the auspices of the Ministry of Commerce.


Asked about this, Cabinet Secretary Mohammad Shafiul Alam told the Bengali Tribune that the new law is very timely. Insurance is a very important sector. Therefore, the government has made new laws for the development of this sector. It is hoped that this will further expand the insurance sector.