Classification of Insurance business As per Section 5 of the Insurance Act, 2010 insurance

business could be explained:

 For the purpose of this Act there shall be two types of insurance business named as life
insurance & non-life insurance.

 Under this section life insurance means the insurance contract relating to human life which
can be, by rules, classified in various sub-class according to the provisions of sub-section (4) &
(5).

 Under this section non-life insurance means all classes of insurance contract other than the
human life insurance contract which for carrying on the non-life insurance business effectively,
by rules, can be classified in various sub-class according to the provisions of sub-section (4) &
(5).
Non-life insurance- e.g. fire insurance/marine insurance/personal accident insurance etc.

Registration of Insurance business:

Registration of Insurance company (section-8)
1. Before starting an insurance business in Bangladesh, you need a registration certificate
from the Insurance Controlling Authority.

2. To apply for registration for life or non-life insurance, you must submit a form to the
Authority as per their requirements.

3. Existing insurers under the 1938 Insurance Act must apply for registration within six
months of this new Act’s commencement.

4. Payment of a prescribed fee is required when applying for registration.

5. Application documents include company details, addresses, tax Ids of directors, and other
necessary information.
 6. For insurers based outside Bangladesh, specific documents are required as per section
114.

7. You need to declare the class of insurance you plan to offer and show that the required
deposit mentioned in sections 23 or 119 has been made.

8. If applicable, provide proof of capital, working capital, and actuarial certification for life
insurance.

9. Include published prospectus, policy forms, premium rates, and other relevant
information.

10. Pay the required fee as per the class of insurance you’re registering for.

11. Include any other documents or information as required by the Act.

12. You must declare that all the information provided in your application is accurate.

13. The Authority will conduct inquiries to verify the documents submitted with the
application.

Provision of restrictions for registering the same insurer for life and non-life insurance
business (Section-13):

No person shall be registered as an insurer:

 for any life insurance business if he is registered for any class of non-life insurance business;
or

 for any non-life insurance business if he is registered for any class of life insurance business.

Accounts, Audit, Actuary report and Statements

Audit (Section-28)

 The balance sheet, profit and loss account, and revenue account of every insurer in respect of
the Insurance business transacted by him in Bangladesh shall, unless they are subject to audit
under the Companies Act, be audited annually by one or auditors in accordance with the
provisions of this Act.

 An auditor employed under the provision of this section shall have authority to exercise such
powers and functions as is given to an auditor under section 213 of the Companies Act.

Special audit (Section-29)

 Whatever may exist in other provisions of this law, the Authority may from time to time order
auditing of all insurance business related transactions, records, documents of any or all insurance
companies doing insurance business in Bangladesh under the provisions of this Act. It may be
mentioned here that an auditor appointed under this section shall not be the same person
appointed as auditors under section 28.

 An auditor appointed under this section shall have a right of access to all such books of
account, registers, vouchers, correspondence and other documents of the insurer and shall be
entitled to require from the directors and officers of the insurer such information and explanation
as may be necessary for the performance of his functions and duties under this section.

 An auditor appointed under this section shall prepare an audit report within a maximum period
of four months of its appointment and shall submit the audit report to the Authority in four
copies.
 An auditor appointed under this section shall be paid by the insurer such fee as may be
prescribed by the Authority.

Actuary report and briefings (Section-30)

1. Life insurance companies must have an actuary investigate their financial status every
year, following specific rules and regulations.

2. An abstract of the actuary’s report must be created as per prescribed procedures.

3. The insurance authority can allow investigations within two years of the previous one if
there are special conditions.

4. These abstracts are also needed when financial investigations are conducted for profit
distribution or when their results are made public.

5. The insurer’s principal officer must certify that all policy details, whether they involve
actual or potential liabilities, have been provided to the actuary.

6. A statement following life insurance business regulations must be appended to the

abstract, usually at least once every three years if annual investigations are performed.

Solvency Margin, Loan and Management of Insurance business

Conditions to be fulfilled regarding solvency margin (Section-43)
1. Insurance companies must maintain a specific solvency margin as required by the Act.

2. If an insurer fails to maintain this margin, they need to create a plan to fix the shortfall
within three months after the Authority’s order.
 3. The plan must be approved by the Authority, and the insurer must comply with it.

4. The Authority has the right to inspect and verify an insurer’s assets, liabilities, and gather
necessary information to ensure solvency margin requirements are met.

5. Life insurance companies must provide specific solvency-related information, attested by

an actuary, as prescribed by the Authority.

6. Non-life insurance companies must also provide specific solvency-related information,

attested by an authorized auditor, following the Authority’s guidelines.

Restrictions in granting loan, advance and financial benefits (Section-44)

 No insurer shall grant any loan, advance or other financial benefits against the security of its
own share.

 No insurer shall grant to or any member of the family of any director, manager, actuary,
auditor or officer of the insurer any loan or temporary advance except a loan on life policy
issued by the insurer within the surrender value.

 Except with the prior approval of the Board of Directors and consent of the Authority no
insurer shall grant any loan or temporary advance to any firm or company in which any director,
manager, actuary, auditor or officer of the insurer or member of the family of such director,
manager, actuary, auditor or officer has interest as proprietor, partner, director, manger or
managing agent.

 The concern director shall not vote at or otherwise participate in the proceedings of the
meeting of the Board considering the grant of any such loan or advance.
 The restrictions as mentioned under sub-section (l) and (2) above shall not be applicable or
advances granted by an insurer to a banking company or to a subsidiary company insurer or to
any insurer which is a subsidiary company.

 No restrictions as mentioned in sub-section (l) shall apply to any stipend paid to any insurance
agent, broker or employer of agents while he is undergoing a course of training approved by the
Authority.

Double Insurance vs. Re-insurance

 If the same risk and the same subject are insured by the policy-holder with more than one
insurer, it is called double insurance. Re-insurance means the transfer of the part of the risk by
the insurer.

 If there are double insurances of properties, the loss will be shared by all the insurers. In the
case of Life insurance all the insurers are liable. In re-insurance, the re-insurer is entitled to get a
proportionate part of the premium, and will be liable for a proportion of part of the loss.

 The re-insurer is liable only to the first insurer. In double insurance each insurer is liable
directly to the Policy-holder.

 Double insurance is a method of assuring the benefit of insurance. In the case of life
insurance, the Insured may have any number of policies and for any amount. Re-insurance is a
method of reducing of the risk of the insurer.

The following rules apply in the case of double insurance:

 Life: no limit. In the case of life insurance there may be any number of policies for any
amounts. A man is entitled to place any value he likes upon his life and therefore upon death, all
the policies are payable whatever the total amount may be.

 Property: not more than actual loss. A person is free to insure his property with any number of
Insurers. But in case of loss occurring, he will not be allowed to recover more than the actual loss
from all the insurers together. This amount will be shared between the insurers in proportion to
the value of each insurer’s policy. If any one of the several insurers pays the whole loss, he is
entitled to contribution from the other insurers.

SEC Ordinance 1969

No. BSEC/CMRRCD/2006-158/208/Admin/81:Whereas, the Bangladesh Securities and
Exchange Commission (hereinafter referred to as the “Commission”) deems it fit that the
consent already accorded by the Commission, or deemed to have been accorded by it, or to be
accorded by it in future, to the issue of capital by the companies listed with any stock exchange
in Bangladesh, shall be subject to certain further conditions on financial reporting and disclosure
in order to enhance disclosure and transparency in the interest of investors and the capital
market; Now, therefore, in exercise of the power conferred by section 2CC of the Securities and
Exchange Ordinance, 1969 (XVII of 1969), the Commission hereby imposes the following
further conditions to the consent already accorded by it, or deemed to have been accorded by it,
or to be accorded by it in future, to the issue of capital by the companies listed with any stock
exchange in Bangladesh, namely:

Preparation of Financial Statements- The financial statements (annual or interim) of the

company shall be prepared in accordance with the Securities and Exchange Rules, 1987 as well
as the provisions of International Accounting Standards (IAS) or International Financial
Reporting Standards (IFRS) as applicable in Bangladesh or as per requirements under the
Financial Reporting Act, 2015 as the case may be, unless otherwise specified in the referred rules
and other rules related to the issue or issuer of securities.

Auditing of Financial Statements. –

 The company shall get its annual financial statements or, where applicable, interim financial
statements, audited by duly appointing an auditor or audit firm enumerated in the panel of
auditors as declared by the Commission from time to time. Explanation: In this sub-condition,
“panel of auditors” means any partnership firm of Chartered Accountants which is in the Panel of
the Commission within the meaning of the Bangladesh Chartered Accountants Order, 1973
(President’s Order No. 2 of 1973) as per the guidelines as prepared by the Commission from time
to time in this regard.

 The company shall not appoint any firm of chartered accountants as its statutory auditors for a
consecutive period exceeding three years.
 The auditor or audit firm shall not also be eligible for performing the auditing of financial
statements of the company for a consecutive period exceeding three years.

 The chartered accountant or auditor or partner of an audit firm shall make the audit report in
accordance with the International Standards on Auditing (ISA) applicable in Bangladesh
ensuring the Provisions of the Companies Act, 1994, the Financial Reporting Act, 2015,
securities laws and other Relevant laws.

Adoption of Quarterly Financial Statements

 The company shall notify the Commission and the stock exchange in advance the date and
time of its Board of directors’ meeting specially called for consideration or adoption of its
quarterly financial statements and for declaration of any entitlement including interim dividend
for the shareholders before 3 (three) working days of holding such meeting.

 The board of directors of the company, while considering or adopting any quarterly financial
statements, shall, in the same board meeting, declare the net asset value (NAV) per share,
earnings per share (EPS) and net operating cash flows per share (NOCFPS) and the board shall
not take any decisions with regard to recommending interim dividend for the shareholders on the
basis of said financial statements without being duly audited and without declaring the
shareholders who shall be entitled to such dividend:

Submission of Quarterly Financial Statements:

1. Non-life insurance companies must submit quarterly financial statements within 45 days
after the first quarter of the financial year. Life insurance companies have 90 days.

2. Within one month after the second quarter and the third quarter, all companies must
submit these statements.

3. Any significant deviations between quarters must be explained.

4. The financial statements must be disclosed in national dailies, online news sites, and
stock exchanges.
 5. Disclosures should follow specific rules and standards, including details on shareholders’
equity, net asset value, earnings per share, and more.

6. The reports should also include cash flow information and adjustments for various
financial activities.

Submission of Annual Financial Statements

1. Annual financial statements must be audited within 120 days of the company’s financial
year end.

2. Non-life insurance companies should submit audited financial statements within 14 days
after completion.

3. Life insurance companies must submit them by June 30th of the Gregorian calendar.

4. The reports must follow specific rules and standards, detailing various financial aspects,
like shareholders’ equity, earnings per share, and more.

5. The financial statements should also include cash flow information and adjustments for
various financial activities.

Authentication of Financial Statements

1. Unaudited financial statements must be signed by the CEO, CFO, Company Secretary,
and at least two directors.

2. Audited financial statements follow the Companies Act, 1994, and regulator
requirements.
3. Companies should post detailed financial statements on their website and the stock
exchange’s website.

4. A notice of the website address should be included in newspapers for quarterly

statements.

5. Companies must share annual reports with shareholders 14 days before the annual
general meeting and also publish them on their website and in newspapers.

6. Printed copies of annual reports should be available for shareholders who request them.