The Insurance Development and Regulatory Authority (IDRA) aims to improve the claim settlement rate from 57 per cent as of June to at least 75 per cent, as it faces a mammoth volume of unpaid claims worth Tk 70 billion.
At a programme at the IDRA office in the capital on Monday, IDRA Chairman Mir Nadia Nivin said the regulator had adopted a two-pronged strategy to reach the goal by gradually clearing the backlog of unpaid claims. She, however, did not mention any timeframe within which the target will be achieved.
Under the strategy, she said, IDRA has been holding meetings with owners and chief executive officers of insurers to identify and resolve obstacles to claim settlement, including compliance-related issues. At the same time, it has been monitoring financially distressed insurers.
Monday’s programme marked the second phase of a special claim settlement initiative, under which Tk 230.4 million in long-pending claims was paid to 5,868 policyholders of five life insurance companies.
The IDRA chairman, who took office in July this year, said quick settlement of long-pending legitimate claims was one of her top priorities. The initiative was aimed at protecting policyholders’ rights and restoring discipline and public trust in the insurance sector, she added.
The payments were made possible by mobilising funds from various sources, including the sale of assets and encashment of security bonds of the insurers concerned.
Ms Nivin said IDRA was conducting one-to-one governance review meetings with insurance companies to determine why legitimate claims remained unpaid and what operational or compliance-related problems were delaying settlement.
“Some companies have ancillary and compliance-related problems,” she said, adding that the regulator is working with relevant parties to resolve the issues quickly.
Of the country’s 82 insurance companies, roughly eight life insurers are facing serious difficulties, and their failure to settle policyholders’ claims on time has eroded public trust across the industry, according to the IDRA chief.
These seven to eight troubled life insurers are being dealt with separately, but IDRA’s intervention is not confined to those companies.
“We have taken a holistic approach to improving claim settlement across the entire insurance sector,” she said.
Companies facing moderate-level problems are also being brought under close supervision, with their financial capacity being reviewed and pressure applied to accelerate settlement of legitimate claims, she added.
Finance minister praises IDRA initiatives
Meanwhile, Finance and Planning Minister Amir Khosru Mahmud Chowdhury praised IDRA’s ongoing reform initiatives during a visit to its office on Monday, particularly its efforts to strengthen governance, transparency and accountability in the insurance sector.
The minister welcomed the move to settle long-pending legitimate claims, saying payment of policyholders’ rightful dues would help rebuild public confidence in insurance.
“Restoring policyholders’ confidence is crucial to strengthening the insurance industry,” he said, adding that visible steps were already contributing to rebuilding trust.
Mr Khosru also said the government was supporting IDRA in making insurance companies more effective, efficient and dynamic through the introduction of risk-based supervision.
He stressed that protecting the rights and interests of policyholders must remain a top priority, adding that customer complaint resolution and service-monitoring mechanisms should also be strengthened to ensure better protection for policyholders.
The minister underscored the need to increase public awareness of insurance, financial security and risk management, saying IDRA’s initiatives should make insurance more accessible, understandable and trustworthy to ordinary people.
He praised the reform measures being pursued under the leadership of Ms Nivin and expressed hope that the reforms would make the insurance sector more robust, transparent and customer-centric, enabling it to play a greater role in the national economy.
IDRA steps up claim settlement
In the second phase of the claim settlement initiative, Padma Islami Life Insurance paid around Tk 120 million to 3,600 policyholders.
Homeland Life Insurance settled claims worth Tk 49.8 million for 1,145 policyholders, while Fareast Islami Life Insurance paid Tk 50 million to 580 policyholders.
Sunflower Life Insurance paid Tk 5.53 million to 300 policyholders, and Sunlife Insurance settled Tk 5.01 million in claims for 243 policyholders.
The second-phase payments followed the first phase, executed on September 3, when IDRA facilitated the settlement of claims worth Tk 145.1 million for 2,549 policyholders of seven life insurers.
The first phase covered policyholders of Baira Life, Fareast Islami Life, Golden Life, Homeland Life, Padma Islami Life, Progressive Life and Sunflower Life Insurance.
The latest move is part of IDRA’s broader effort to address the sector’s chronic claim settlement problem, which has left thousands of policyholders waiting for years to receive legitimate dues.
The IDRA chairman said the effort to pay policyholders back would continue, and the remaining valid but unpaid claims would be verified and scrutinised before being settled.
Source: https://thefinancialexpress.com.bd/stock/idra-targets-75pc-claim-settlement-rate-amid-tk-70b-backlog
