Administrator appointed for Sonali Life Insurance

The Insurance Development and Regulatory Authority (IDRA) has appointed Brig Gen (retd) SM Ferdous as administrator of Sonali Life Insurance with immediate effect.

After taking charge, Ferdous was tasked with submitting a report to the IDRA and hiring a qualified local or foreign auditor to conduct a full audit as soon as possible, according to a letter sent to the new administrator.

The administrator will manage the business and related activities, including the issuance of policies, as per clause 95(3) of the Insurance Act 2010.

He will also be able to appoint one or more consultants if needed, the letter also reads.

Sonali Life's board was dissolved due to corruption and irregularities, Zahangir Alam, spokesperson of IDRA, told The Daily Star.

 "Besides, an administrator for Sonali Life has been appointed and he joined the company today (Sunday)," he said.

The administrator was appointed two weeks after an audit found Sonali Life's former chairman Mostafa Golam Quddus and six of his family members, who were also directors in the company, were involved in embezzling around Tk 187.84 crore from the company.

The IDRA conducted the audit after receiving an intelligence report from a government agency. 

The IDRA appointed audit firm Hoda Vasi Chowdhury & Co on December 31 last year to investigate 17 claims of irregularities, including over the appointment of Quddus as chairman in 2023.

The audit found that Quddus and his six family member embezzled funds in different ways, including by issuing shares for themselves, making illegal payment to companies owned by Quddus, and paying salaries to his family member directors.

Huge money was also pocketed through illegal purchases of luxury cars and payment of additional dividends to said directors as well as foreign travel and treatment bills.

They also took a large sum of money through illegal commissions from group insurance policies.

Established in 2013, Sonali Life has 204 branches with 26,693 agents across the country, according to IDRA data.

The company settled 99.9 percent of its total claims in 2020, 99.92 percent in 2021 and 99.98 percent in 2022.

In 2023, the company settled almost all its claims worth Tk 122.26 crore.