KATHMANDU: The Bangladesh regulator has issued stern directives warning of action after life insurers in Bangladesh put undue pressure on insurers to buy new insurance before paying claims.
Clarifying the period for payment of claims to the insured, the regulator Insurance Development and Regulatory Authority (IDRA) has directed not to issue any insurance policy in the name of the insured or the claiming party if the claim is paid later than the stipulated period. Act A
There is a provision in the Insurance Act that the claim should be settled within 90 days. The new circular has given an additional 30 days to the insurer to clear the payment within 120 days. The insurer who pays the claim within 120 days will be able to issue a new policy in the name of the same insured or claimant only after 30 days of payment of claim. If the claim is paid after 120 days, then the new policy will not be allowed to be issued for at least 6 more months i.e. 180 days.
Apart from this, the IDRA circular states that the amount of claim payment will have to be paid in a lump sum. No amount other than government fees or arrears can be deducted from the claim payment.
This directive means that the insurance company can pay the customer’s claim at any time and in such a situation, there will be no compulsion to pay the insurance claim within the stipulated time. On the other hand, even if the customer voluntarily wants to buy a new insurance, due to the 180-day restriction in the circular, the customer will not be able to buy any new insurance policy from the same insurer.
