Finance Minister A H M Mustafa Kamal said from now on, insurance policy premium will not go outside the country, as local insurers will deal with all public sector policies.
"Presently, the local insurance companies have the capacity to cover all risks. So, there is no justification to send premium overseas in the form of re-insurance, covered by the foreign insurers," he said on Wednesday.
Mr Kamal was briefing journalists after receiving a cheque of Tk 500 million as dividend on the government's equity in the state-owned Sadharan Bima Corporation (SBC) for the year 2018.
Chairman of the SBC Professor Shibli Rubayet-Ul-Islam and its Managing Director Shahriar Ahsan handed over the cheque to the finance minister.
The National Board of Revenue (NBR) Chairman Md Mosharraf Hossain Bhuiyan attended the programme.
Mr Kamal further said: "Once it was believed that Bangladesh's insurance companies are small. They do not have enough capacity. If any accident takes place, they will not be able to pay the insurance claims."
"So, the insurance premium against imports of the government for different development programmes used to go outside."
"But we have clearly stated that from now on the insurance premium from our country will not go abroad. The insurance coverage of the public sector imports, especially those for various development programmes, will be covered by the local companies."
When the premium will not go out of the country, revenue of the local insurance companies will automatically go up, Mr Kamal also said.
"We have taken steps to raise revenue of the SBC. The company will now receive insurance policies of the sectors, from which it did not get any policy. So, its revenue will automatically increase."
The finance minister said, "The insurance for public sector imports will have to be covered by the local companies. In the terms and conditions, it will be written as cost, insurance and freight (CIF)."
"At present, we have to pay the insurance premiums to the foreign companies in foreign exchange (forex). Thus our hard-earned forex goes to them. Such system does not exist in other countries across the world. I don't know who had introduced the system in Bangladesh."
When asked about alleged complexities in paying insurance claims by the local companies, Mr Kamal said it might happen to some extent in case of the life insurance companies, but not in case of the non-life insurance ones.
There may be some reasons for those complexities - both from the customer side and the insurance company side - during payment of the insurance claim. When any insurance policy is opened without proper information, those complexities emerge, he opined.
Mr Kamal, however, asked the Insurance Development Regulatory Authority (IDRA) to (take necessary steps to) settle all disputes (regarding the sector).
Asked whether any ombudsmen is necessary for settling the disputes, he said it is not necessary at this moment, as the IDRA can act properly. "I think self-regulation is the best regulation. We have the insurance association and the regulator, they can settle these properly."
Firstly, the IDRA should sit with all the parties concerned regularly to create awareness, he added.