Insurance regulator has opposed 'conditional listing' of insurance companies in the capital market proposed by the Securities and Exchange Commission (SEC), sources said.
In a letter to the Ministry of Finance and SEC, Insurance watchdog Insurance Development and Regulatory Authority (IDRA) said insurance companies must fulfill the minimum paid up capital criteria fixed by the new insurance law'2010 in order to get listing in the capital market.
The insurance law fixed minimum paid up capital Tk 400 million for general insurance and Tk 300 million for life insurance companies.
The new law also said sponsors must own 60 per cent share of a insurance company and the rest should be owned by the public.
At present IPO applications of five companies are pending with the SEC over the paid up capital issue. They are National Insurance, Meghna Insurance, Padma Life Insurance, Desh General Insurance and South Asia Insurance.
These insurance companies are facing daily fine of Tk 1000 for their failure to get listed in the capital market in due time.
The law makes mandatory to get listing for a insurance company after 3 years of commencement of business.
Meanwhile, in a response to a finance ministry query Insurance watchdog opined that insurance companies must have minimum Tk 300 million as paid up capital to get listing in the capital market in line with the insurance law' 2010.
Sources said, following a plea from the Bangladesh Insurance Association (BIA), the SEC proposed to give waiver to some insurance companies whose paid up capital is below Tk 300 million to pave the way for getting listing in the capital market citing a special provision of insurance law' 2010.
SEC sent the proposal to the ministry of finance in this regard. The ministry forwarded the proposal to the insurance regulator for their recommendation.
At present, most of the non listed general insurance company paid up capital is Tk 60 million and Tk 30 million for life insurance companies.
In order to get listing general insurance companies have to augment paid capital to Tk 240 million and life insurance companies to Tk 180 million.
But SEC in a letter referred that the new insurance law regarding paid up capital is not applicable for those companies who got license before formulating insurance law'2010. The law is applicable for only newly licensed companies.
But after reviewing the law IDRA opined that minimum paid up capital criteria is applicable for all the functioning insurance companies of the country.
In a letter to the Ministry of Finance and SEC, Insurance watchdog Insurance Development and Regulatory Authority (IDRA) said insurance companies must fulfill the minimum paid up capital criteria fixed by the new insurance law'2010 in order to get listing in the capital market.
The insurance law fixed minimum paid up capital Tk 400 million for general insurance and Tk 300 million for life insurance companies.
The new law also said sponsors must own 60 per cent share of a insurance company and the rest should be owned by the public.
At present IPO applications of five companies are pending with the SEC over the paid up capital issue. They are National Insurance, Meghna Insurance, Padma Life Insurance, Desh General Insurance and South Asia Insurance.
These insurance companies are facing daily fine of Tk 1000 for their failure to get listed in the capital market in due time.
The law makes mandatory to get listing for a insurance company after 3 years of commencement of business.
Meanwhile, in a response to a finance ministry query Insurance watchdog opined that insurance companies must have minimum Tk 300 million as paid up capital to get listing in the capital market in line with the insurance law' 2010.
Sources said, following a plea from the Bangladesh Insurance Association (BIA), the SEC proposed to give waiver to some insurance companies whose paid up capital is below Tk 300 million to pave the way for getting listing in the capital market citing a special provision of insurance law' 2010.
SEC sent the proposal to the ministry of finance in this regard. The ministry forwarded the proposal to the insurance regulator for their recommendation.
At present, most of the non listed general insurance company paid up capital is Tk 60 million and Tk 30 million for life insurance companies.
In order to get listing general insurance companies have to augment paid capital to Tk 240 million and life insurance companies to Tk 180 million.
But SEC in a letter referred that the new insurance law regarding paid up capital is not applicable for those companies who got license before formulating insurance law'2010. The law is applicable for only newly licensed companies.
But after reviewing the law IDRA opined that minimum paid up capital criteria is applicable for all the functioning insurance companies of the country.
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