Finance minister Mustafa Kamal on Sunday asked 28 non-listed insurance companies to get enlisted with the stock exchanges by offloading shares by three months.
He gave the directive at a meeting with executives of the insurance companies at his office at the Planning Commission on Sunday.
Mustafa warned that if any insurance company failed to get enlisted with the bourses, Dhaka and Chittagong stock exchanges, by three months, tough action would be taken against it. Initially a temporary ban would be imposed on unwilling companies before taking the tough action.
The number of insurance companies in Bangladesh is 75, of which 47 are listed and 28 are non-listed. Repeated moves were taken in the past, without any major success, to bring the non-listed insurance companies into the market.
According to the companies law rules, if the paid-up capital of any public limited company exceeds Tk 40 crore, it is compulsory for the company to get enlisted with the capital market within one year.
For banks and insurance companies the deadline for getting enlisted, however, is three years after they become public limited companies.
If any company fails to get enlisted with the capital market within the stipulated timeframe, it can get six-month additional time showing logical grounds.
For violation of this rule, there is a provision to impose a fine of Tk 1,000 a day on the insurance companies.
Last month, the Bangladesh Insurance Association warned its member insurance companies against giving more than 15 percent of insurance premiums as commission to agents for collecting the premiums.
Insurance Development and Regulatory Authority (IDRA) of Bangladesh and the BIA jointly took a number of steps to recover the country’s insurance sector from its current fragile state.
Mustafa Kamal also informed that insurance would be made compulsory for flats, residential buildings, corporate offices, commercial buildings and structures, crops and livestock in phases.
