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Corporate - January 27, 2024

Insurance sector in crisis due to irregularities and corruption

Special Correspondent: The insurance sector grapples with a crisis of confidence amid rampant irregularities and corruption. Funds are being misappropriated, leaving many unable to withdraw insurance claims despite prolonged attempts.
Victims and experts emphasize that transparency and good governance are crucial to restore trust in the sector. At a dialogue titled ‘Initiation of Social Insurance Forum in Bangladesh,’ participants highlighted the prevailing negative perception of insurance, eroding faith in the entire industry.
Former cabinet secretary M. Musharraf Hossain Bhuiyan remarked on the behavior of politicians turned bureaucrats, noting a stark contrast between their rhetoric outside and their actions in government.
Deputy Secretary of the Ministry of Social Welfare, ABM Sadiqur Rahman, raised concerns about the inadequate compensation for accidents involving government-insured vehicles. He urged the importance of thorough documentation and cautioned against blindly trusting insurance companies that fail to deliver on promises.
Rahman shared instances of dissatisfaction among policyholders, especially those in the government and education sectors, emphasizing the need for trust-building measures. He stressed that corruption and evasion of responsibilities undermine confidence in social insurance.
A dialogue at BRAC in the capital, moderated by Parveen Mahmud, a member of the Board of Trustees of CPD, brought together representatives from various organizations. The main presenter, Khandkar Golam Moazzem, research director of the Center for Policy Dialogue (CPD), discussed the need for transitioning social security programs to align with the country’s rising income.
Moazzem highlighted challenges in the implementation of government commitments, pointing to conceptual and legal differences between organizations, weak institutional conditions, and manpower shortages.
Sahedul Hasan, Joint Director of Deposit Insurance Department at Bangladesh Bank, assured that 91 percent of bank deposits are insured, mitigating risks for depositors in case of bank closures.
Ahmed Mehedi Hasan, HR Director of NGO SOS Children’s Village, emphasized the need to address the lack of confidence in the insurance sector, citing irregularities and advocating for trust restoration.
Hasan Khaled, Deputy Director General of PKSF, mentioned the organization’s indirect involvement with insurance, particularly for migrant workers. SubhashishBarua of Green Delta Insurance highlighted the undervaluation of remittances from expatriate workers, emphasizing the importance of supporting their families.

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