IDRA initiative pays Tk 37.5cr in claims

A total of Tk 37.54 crore in insurance claims has been paid to 8,417 policyholders of seven troubled life insurers in two phases under an initiative of the Insurance Development and Regulatory Authority (IDRA).

The authority arranged funds from various sources, including the insurers’ assets and government securities, to settle long-pending claims.

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In the first phase, Tk 14.51 crore was paid to 2,549 policyholders of BAIRA Life Insurance, Fareast Islami Life Insurance, Golden Life Insurance, Homeland Life Insurance, Padma Islami Life Insurance, Progressive Life Insurance and Sunflower Life Insurance.

In the second phase, Tk 23.03 crore was paid to 5,868 policyholders of Padma Islami Life Insurance, Homeland Life Insurance, Fareast Islami Life Insurance, Sunflower Life Insurance and Sunlife Insurance.

Noor Mohammed Bhuiyan, chief executive officer of BAIRA Life Insurance, said the company had not yet sold any of its assets, treasury bills or bonds, although the process of selling assets was underway.

The company was earning interest income, which was helping it arrange funds to pay insurance claims, he said.

Around Tk 100 crore in claims remained unpaid, affecting about 30,000 customers, Bhuiyan estimated.

He said it was difficult to predict whether it would take one month, one year or two years to settle all the outstanding claims. The company would continue paying policyholders as funds became available, he added.

He later clarified that the company’s assets and current holdings would be enough to cover about 80 percent of the outstanding claims.

A senior official of Padma Islami Life Insurance said the company was currently using interest income from its capital to pay staff salaries and meet other expenses.

The company owes around Tk 80 crore to policyholders and is working to settle the outstanding claims by recovering and selling its assets, the official said.

The Metro Rail project’s acquisition of 8.5 katha of the company’s land in Malibagh is expected to generate more than Tk 40 crore, he said. The company also owns 40 katha of land in Bashundhara.

The reporter also contacted Md Abdur Rahim Bhuiyan, chief executive officer of Fareast Islami Life Insurance, but he did not respond.

CLAIMS SETTLEMENT TO CONTINUE

Mir Nadia Nivin, chairman of IDRA, said ensuring the timely settlement of legitimate claims was one of the authority’s key priorities.

“Faster and more transparent claim settlements are essential to rebuilding public confidence in the insurance sector. IDRA will take all necessary measures to protect the interests of policyholders,” she said.

She said settling the claims would protect the financial rights of policyholders and help restore confidence in the insurance industry.

The initiative will continue beyond the first two phases, she added. The remaining valid and unpaid claims will be reviewed and verified, and payments will be made gradually after the necessary procedures are completed.

“The initiative will continue until the legitimate rights of policyholders are ensured,” the IDRA chairman said.

Barrister Khan Mohammad Shameem Aziz, an advocate of the Supreme Court, said any amount that can currently be returned to policyholders, even if small, should be considered a positive step.

He said efforts should be made to recover and distribute as much money as possible from the companies’ available assets.

Extraordinary legal measures should also be considered within the existing regulatory framework to protect policyholders who had deposited their money with the companies, he added.

Shameem urged IDRA to review the existing laws and introduce stricter enforcement measures to ensure that policyholders’ claims are paid.