IDRA warns life insurers over fake data

The Insurance Development and Regulatory Authority (IDRA) has directed life insurance companies to provide accurate information in their reports, stating that inconsistencies were regularly found with what it later unearthed through investigations.

"Discrepancies are being found in the information or reports being sent from the life insurance companies as per the instructions of the regulator," the IDRA said in a letter sent to the companies last Sunday.

Dissimilarities are also there in "information being sent to the unified messaging platform and information the regulator found through its investigation", it said.

This is hindering the regular forwarding of accurate information to the Prime Minister's Office alongside the Ministry of Finance, it added.

The companies regularly have to provide information to the IDRA regarding policies, premiums, insurance claims, life funds, agents and investments, explained an IDRA official to The Daily Star.

There is a lot of discrepancy between what they claim and what was in reality, he said.

Accurate information should be shared according to the Insurance Act 2010, otherwise, legal steps will be taken against officials concerned, such as managing directors, chief executive officers, chief financial officers and company secretaries, the letter added.

Moreover, fines of a maximum of Tk 1,00,000 and a minimum of Tk 50,000 can be imposed as per the law, it said.

Some publicly listed companies showcase fabricated reports to inflate share prices, SM Masudul Haque, director for the life insurance department at the IDRA, told The Daily Star.

Moreover, they claim to have a lower number of agents than what was in reality, for which the letter was issued, he said.

The IDRA needs to form a unit like the Bangladesh Financial Intelligence Unit to solve these problems, he said.

The directive comes at a time when claims of around 10 lakh policyholders are in limbo owing to a liquidity crisis in 29 life insurance companies.

The unsettled claims involved Tk 3,050 crore in the four years to the second quarter of 2023, according to data from the IDRA.

Just a dozen or so life insurance companies resolved only 14.09 percent of the 24,605 complaints they received in the first 10 months this year.

Of them, 95 percent are related to non-settlement of claims despite policies reaching maturity, said an IDRA official.

The remaining complaints are linked to management issues, violation of rules in appointing top officials and bad investments, among others.

Currently, there are 35 life insurance companies in Bangladesh providing schemes for nearly 2 crore people.

They settled 85 percent of their claims in 2020, 58 percent in 2021 and 67 percent in 2022, according to the IDRA.