Administrator appointed at Swadesh Islami Life

The Insurance Development and Regulatory Authority (IDRA) has appointed Sk Md Rezaul Islam, former additional secretary of the Ministry of Chittagong Hill Tracts Affairs, as administrator of Swadesh Islami Life Insurance Company with immediate effect.

The administrator was appointed as Swadesh Islami has violated section 80 (4) of the Insurance Act, 2010, by keeping the company's CEO post vacant for more than five months, according to a letter issued by the insurance regulator.

According to the section 80 (4) of the Insurance Act, 2010, the CEO post of an insurance company shall not be kept vacant for more than three months at a time.

The administrator was appointed as the absence of the CEO has been hampering the company's administrative works, Zahangir Alam, spokesperson of the IDRA, told The Daily Star yesterday.

The administrator will perform duties as per the Insurance Act 2010, according to a letter sent to the new administrator.

The bank accounts of the company shall be maintained under the joint signature of the administrator and another officer, the letter read.

Things began on August 3 last year, when the insurance regulator issued an office order saying that Md Ekhtier Uddin Shahin will not be able to serve as the CEO of Swadesh Islami.

On March 21 this year, the High Court stayed IDRA's decision for six months, which on May 13 got halted for eight weeks by a Supreme Court (SC) order given by Justice M Enayetur Rahim, chamber judge of the appellate division of the SC.

There is no scope for Shahin to get back his job as the CEO of Swadesh Islami following the SC order, Barrister Mohammad Shafiqul Islam, lawyer of IDRA, told The Daily Star.

In January this year, the insurance watchdog relieved 12 of the 17 directors of Swadesh Islami, including its chairman, of their duties over allegations of embezzling fixed deposits and breaching the insurance act.

The accused include: its chairman Maksudur Rahman, vice-chairman Shahidul Ahsan and directors Nurul Alam Chowdhury, Baharul Ahsan, Marjanur Rahman, Farah Ahsan, ABM Abdul Mannan, Shamsun Nahar Rahman, Ferojul Ahsan, Kamrul Ahsan, Mohammad Manjurul Islam and Madina Tun Nahar.

The company took a loan of Tk 14.3 crore from NRBC Bank against a fixed deposit of Tk 13.05 crore, which was the company's paid-up capital, according to IDRA documents.

However, as per Insurance Act 2010, the paid-up capital of an insurance company has to be kept free of liability.

Moreover, the loan was not shown in the balance sheet, so it appears that it was allegedly embezzled.

In February this year, the regulator suspended Swadesh Islami's registration for three months for breach of law.

Swadesh settled 50 percent of its total claims in 2020, which fell to 48.15 percent in 2022, according to an IDRA document.

It settled 37 percent of claims until the third quarter of 2023, paying Tk 31 lakh against claims amounting to Tk 86 lakh, it said.