Bangladesh’s insurance regulator will release guidelines this year to allow insurance to be marketed through bank channels, according to industry insiders.
The Insurance Development and Regulatory Authority (IDRA) has already drafted a set of guidelines for bancassurance which had been disseminated for feedback, reported The Financial Express.
Industry insiders are hopeful that bancassurance will create a win-win situation for both the banks and financial institutions as well as insurance companies.
IDRA chairman Dr Mosharraf Hossain told The Financial Express, “”Banks will get a licence as a corporate insurance agent and earn non-funded revenue.”
According to the draft guidelines, banks will be granted bancassurance licences for a period of three years. A bank cannot sign bancassurance agreements with more than three insurance companies.
Both insurance companies and banks are required to get approval from their respective regulators for entering into the agreements.
Bangladesh Insurance Association 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 has 58 banks operating nationwide through more than 10,000 branches.
In Bangladesh, only 12m out of 160m people have life insurance policies.