The Insurance Development and Regulatory Authority (IDRA) has plans to issue final guidelines next year covering bancassurance and paving the way for expanding the insurance market through banking channels.
The insurance regulator has already drafted a set of guidelines for bancassurance which has been circulated for public feedback, reported The Financial Express.
“We will consult with stakeholders after getting public opinions. Then bancassurance will be introduced next year, once other formalities are done,” IDRA chairman Dr Mosharraf Hossain told the newspaper.
Industry insiders are hopeful that bancassurance will create a win-win situation for banks and financial institutions, as well as insurance companies. In Bangladesh, around 12m out of 160m people have life insurance policies.
Dr Hossain said that under the guidelines, banks will be licensed as corporate insurance agents.
The draft guidelines also propose a bancassurance agent cannot sign agreements with more than three insurance companies.
Both the insurance companies and banks will be required to get approval from their respective regulators, before entering into agreements.
Bangladesh Insurance Association (BIA) President Sheikh Kabir Hossain said, “We have long been demanding that bancassurance be introduced, but banks weren’t much interested.”
The insurance industry in Bangladesh comprises 79 insurers, including 33 life insurers whereas the banking industry comprises 58 banks operating nationwide through more than 10,000 branches.