The Insurance Development and Regulatory Authority (IDRA) has directed all insurers to comply with rules that require their sponsors to raise the stakes they hold to 60% in their respective companies and the companies’ minimum paid-up capital to BDT300m-400m ($3.5m-4.7m) within one month.
IDRA has issued letters to the companies concerning the matter, reported New Age.
According to the rules, an insurer, incorporated in or outside Bangladesh before the commencement of the Insurance Law, 2010, must have the required minimum paid-up capital.
For life insurance companies, the paid-up capital must be at least BDT300m. For non-life insurance companies, the paid-up capital must be at least BDT400m. For both life and non-life insurers, 60% of the shares in the insurance company must be held by the sponsors and the remaining 40% must remain open for public subscription.
At present, of the 49 listed life and non-life insurance companies, only five companies have more than 60% shares held by their sponsor-directors.
The five companies are Crystal Insurance, Dhaka Insurance, Express Insurance, Reliance Insurance and Bangladesh National Insurance.