Mr. Ahasanul Islam Titu, MBA (USA) National Insurance Policy: “Progress so far towards implementation” Mr. Ahasanul Islam Titu, MBA (USA) CEO, Sandhani Life Insurance Co. Ltd.

Introduction National Insurance Policy 2014 was developed and gazetted considering the dream of “The Father of Nation, Bangabandhu Sheikh Mujibur Rahman” to make a successful economy in Bangladesh Considering the dream of Bangabandhu, Bangladesh Government aim to ensure resident’s social and financial security by implementing mandatory Life, Health and Property insurance gradually. Further it was forecasted in the National Insurance Policy that 100% Peoples and risk based assets in Bangladesh should be insured

Introduction Outset of the National Insurance Policy 2014 Background of Bangladesh Insurance Market Economic contribution of insurance Problems of insurance industry Insurance Act, rules & regulations Strategic planning of national insurance policy

Background There are 76 Private Insurance Companies in Bangladesh 31 Life Insurance Companies & 45 Non Life Insurance Companies Side by side SBC & JBC are doing government business traditionally Insurance Penetration rate in Bangladesh is less than 1% since last 10 years

Background There are 76 Private Insurance Companies operating insurance business in Bangladesh 31 Life Insurance Companies & 45 Non Life Insurance Companies Side by side SBC & JBC are doing government business traditionally Insurance Penetration rate in Bangladesh is less than 1% since last 10 years

Background GDP Contribution of Insurance Sector in Bangladesh reached at .38% which is continuously in a decreasing trend. GDP Contribution of Insurance Sector in Asian Countries at current price is 5.5% on 2015 Global insurance premium growth increased to 3.8% in 2015 from 3.5% in 2014

Background Premium income & Growth of life Insurance Companies Year 2015 2016 2013 2012 2011 Premium Income (mill) 70,779 66,878 62,429 62,438 59,735 Growth Rate 5.83% 7.12% -0.01% 4.52%

Background Income & Growth of Non-life Insurance Companies Year 2015 2014 2013 2012 2011 Premium Income (Mill) 24,140 22,679 21,037.5 19,457 17,274 Growth Rate 6.44% 7.8% 8.12% 12.63% - U-writing Profit (Mill) 2,833 2,798 3,191 3,060 2,000 1.25% (12.31%) 4.28% 53%

Economic contribution of insurance GDP Contribution of insurance in worlds Economy UK : 11.8% USA: 8.1% Japan: 8.1% Bangladesh: . 38% Brazil: 3.2% India: 4.1% China: 3%

Problems of insurance industry Absence of insurance awareness in both private and public sector Insurance is not mandatory in Bangladesh other than marine & car insurance Human Resources problem Lack of rules and regulations Lack of corporate governance

Problems of insurance industry Lack of integrated software and IT based infrastructure Lack of insurance education Lack of Corporate agents and individual agents Moral hazard problem among field officers Lack of innovative insurance product Lack of quality insurance institute

Insurance Act, rules & regulations New rules is required instead of rules enacted on 1958. Total 16 rules and regulations have been gazetted on Adcock basis (5 rules & 11 regulations), whereas 35 rules & regulations yet to be gazzeted Few areas of Insurance Act 2010 required to be amended Lining other Acts with Insurance Act for smooth process of financial market

Strategic planning of national insurance policy Insurance to be a part of the national budget of Bangladesh Confirming 4% GDP contribution of insurance sector in the national economy within 2021 Increasing the penetration rate of insurance in Bangladesh in a suitable position

Strategic planning of national insurance policy Confirming maximum use of insurance policy in the field of health, agriculture and property insurance Confirming effective use of micro insurance and bankassurance Confirming insurance for as a tool of social safty-net

Strategic planning of national insurance policy Confirming proper insurance education Implementing 50 objectives of National Insurance Policy within a time frame Accountability of the responsible authority incompliance with the implementation of related objectives

50 objectives of the National Insurance Policy Time frame Total objective Implementation status Short term 2014-2015 12 X Mid term 2016-2017 28 Long term 2018-2021 10

IDRA & Ministry of Finance 12 Short Term Objectives and guideline to be achieved on or before 2015 Current reform activities of the insurance industry should be target oriented Responsibility: IDRA & Ministry of Finance Fix the target premium income, penetration rate and a target time to achieve the plan Objective 1 Ensure appropriate formation of Insurance Laws Policy analysis & Research the laws to set up international level. Strategic Action Objective 2

12 Short Term Objectives and guideline to be achieved on or before 2015 Minimum capital of insurance companies to be ensured Responsibility: IDRA & Ministry of Finance Set up a guideline for the insurance companies those are failed met the minimum capital. Objective 3 Strategic Action Ensure secured electronic communication through data transfer Responsibility: All Insurance Companies, IDRA Ensuring computerized risk based regulatory system; confirm integrated accounting system Objective 4

12 Short Term Objectives and guideline to be achieved on or before 2015 Enacting insurance investment rules & eliminate unlawful investment process Responsibility: IDRA & Ministry of Finance Surplus fund of insurance companies to be invested in an attractive portfolio. Objective 5 Strategic Action Objective 6 Strengthening IDRA Responsibility: IDRA & Ministry of Finance Appointing new employees Confirming infrastructure Ensuring workers Independence in the workplace

IDRA & Ministry of Finance 12 Short Term Objectives and guideline to be achieved on or before 2015 Ensuring uniform organizational structure for all insurance companies Responsibility: IDRA Guideline to be prepared to evaluate employees skill to confirmed a certain level of standard. Objective 7 Strategic Action Objective 8 Create professional atmosphere in the insurance sector Responsibility: IDRA & Ministry of Finance Establish Chartered Insurance Institute & its further operational plan

12 Short Term Objectives and guideline to be achieved on or before 2015 Human Resources Development of Insurance Industry Responsibility: IDRA, Ministry of Finance, Education Ministry, UGC, Insurance Academy, University Authority Make a strengthen Bima Academy; Make collaboration with international Chartered Insurance Institute and take Actuarial measures Objective 9 Strategic Action Prepare disciplinary guideline and ensure its standard practice Responsibility: IDRA Prepare and publish the booklet of the disciplinary guideline and ensure its practice Objective 10

12 Short Term Objectives and guideline to be achieved on or before 2015 Protect illegal exercise of excess commission Responsibility: IDRA Investigate insight of the excess commission practice and Enforce circular to protect excess agent commission Objective 11 Strategic Action Objective 12 Identify risk based capital and confirm re-insurance Responsibility: IDRA Finding limitations and enforcing guideline

28 Mid-term objectives 18 Objectives Supposed to be implemented within 2016 10 objectives will be implemented within 2017 Sl No Objective Implementation Year Responsibility 01 SBC & JBC will be managed commercially 2017 IDRA, Fin-Min; SBC & JBC 02 Identify & Analysis other acts which are contradictory with insurance Act 2016 IDRA, Fin-Min

28 Mid-term objectives Objective Target Year Responsibility Sl No Objective Target Year Responsibility 03 Deposit Insurance 2016 IDRA & Fin- Ministry 04 Expanding lawful Insurance business all over the country IDRA & all Ministry 05 Considering institutional risk management strategy and confirming its implementation IDRA 06 Enforcing control management in micro insurance

IDRA & all Ins Companies 28 Mid-term objectives Sl No Objective Target Year Responsibility 07 Analysis actuarial valuation system and its regulations 2017 IDRA 08 Institutionalizing customers claim settlement procedure 2016 Insurance Companies 09 Forming universal internal audit and inspection system for all insurance companies IDRA & all Ins Companies

28 Mid-term objectives Objective Target Year Responsibility Sl No Objective Target Year Responsibility 10 Confirming professionalism of controlling body 2017 IDRA 11 Confirming Public disclosure 2016 IDRA & all Ins Com, Fin-Min 12 Forming Financial intelligence cell IDRA, Fin-Min, BFIU 13 Insurers accounts to be developed according to international standards IDRA & all Ins Companies

28 Mid-term objectives Objective Target Year Responsibility Sl No Objective Target Year Responsibility 14 Implementing Solvency Margin 1 2016 IDRA 15 Widening export credit guarantee scheme IDRA , Cmrc Ministry, Export Bureau, SBC 16 Enacting Shariah based law for Islamic insurance companies for the smooth process of Islamic Ins business operation IDRA, Fin-Min, Min-Religion

28 Mid-term objectives Objective Target Year Responsibility Sl No Objective Target Year Responsibility 17 Skill development of broker /surveyor / financial associates 2016 IDRA 18 Expand in-country re-insurance business IDRA, Fin-Min 19 Mandatory insurance for government property 2017 IDRA & all Ministry 20 Widening insurance literacy IDRA, Min-Edu, All Ins.

28 Mid-term objectives Objective Target Year Responsibility Sl No Objective Target Year Responsibility 21 Implanting pension fund for private sector employees 2016 IDRA, JBC, Fin-Min, NBR, All Ins 22 Development of conventional agency into multidimensional way IDRA, All Ins Companies 23 Implementing rewarding system in Insurance Industry IDRA 24 Ensuring area wise and national assistance to meet the risks 2017 IDRA, Min-Home & Min-Fin, All Ins.

28 Mid-term objectives Objective Target Year Responsibility Sl No Objective Target Year Responsibility 25 Meeting customers demands and plan new ideas for the development 2016 IDRA, All Ins 26 Analysis mortality and mobility table IDRA, All Ins Companies 27 Ensuring Corporate Governance practice in insurance sector 2017 28 Implementing National Insurance Day IDRA, BIA, Fin-Min, All Ins Companies

10 Long-term objectives to be met from 2018-2021 Sl No Objective Responsibility 01 Implementing Solvency Margin- 2 IDRA 02 Analysis of the premium income of Life Insurance Business to forecast a new target 03 Increase insurance awareness among populations IDRA, BIA, Ministry of information 04 Mandate Insurance for all workers Ministry of labor welfare , IDRA and All insurance companies

10 Long-term objectives to be met from 2018-2021 Sl No Objective Responsibility 05 Innovate multidimensional Insurance policy IDRA, All Insurance Companies 06 Institutionalization of group insurance for all commercial organizations step by step IDRA, Ministry of commerce and industry, FBCCI 07 Widening overseas insurance business IDRA, Ministry of Finance, All Ins. companies 08 Attracting female participation in the insurance industry

10 Long-term objectives to be met from 2018-2021 Sl No Objective Responsibility 09 Motivate innovating new product for the poor people IDRA, Concerned Ministry & BIA 10 Implementing social insurance nationally