Sultan-ul-Abedine Molla, a former member of IDRA, has been appointed the administrator as per section 95 of the Insurance Act 2010
The Insurance Development and Regulatory Authority (IDRA) on Thursday dispatched an administrator to the Delta Life Insurance Company to protect policyholders after a special audit found financial irregularities in the country’s oldest insurer.
Sultan-ul-Abedine Molla, a former member of IDRA, has been appointed the administrator as per section 95 of the Insurance Act 2010.
“My main responsibility is to protect the policyholder interest and stop the anomalies,” Molla told Dhaka Tribune, adding that he has already started work.
Molla will work with the company as per the insurance laws.
In a statement, Delta Life acknowledged the appointment of the administrator.
However, in a virtual press conference on the day, the Delta Life Insurance management claimed the appointment was unlawful and intentional.
“For the sake of policyholders, we are here today. We earlier sensed that the IDRA is going to appoint an administrator to harass the company. We were supposed to respond to the show-cause notice today [Thursday] but they did not give us that opportunity,” said a statement from the company.
This comes after the insurer on Sunday has brought an allegation of bribery involving Tk 50 lakh against the IDRA Chairman M. Mosharraf Hossain pertaining to renewing the contract of its chief executive officer along with other regulatory approvals.
In a media briefing on Sunday, Chowdhury Qamrul Ahsan, executive director of Delta Life Insurance, made the claim by presenting an audio clip between Hossain and Md. Abdul Awal, an executive of the 35-year-old insurer, in which the IDRA chairman can be heard soliciting a bribe of Tk 50 lakh.
As per the written document of the company, on November 13, Hossain called Awal to his house and demanded Tk 2 crore as bribe for renewing the contract of CEO, Adeeba Rahman, and approving the actuarial basis of the insurer for 2019.
But the Delta Life employee responded in the negative.
The IDRA chairman, who was previously a senior officer at Delta Life Insurance, then brought down the amount allegedly to Tk 1 crore and later to Tk 50 lakh.
After the meeting, Awal informed the matter to the Delta Life top management, who directed him to initiate another conversation with the IDRA chairman and record it.
On November 14, Awal again met with Hossain at his residence and recorded the conversation, in which he demanded Tk 50 lakh.
If the amount is paid, Hossain would renew the CEO's contract, improve the actuarial basis and wave the fines. If not paid, he would get journalists to write against Delta Life and appoint an administrator.
A day later, after the Delta Life management did not respond to the call for the kickback, the IDRA chairman rejected the renewal of the CEO's contract.
“As we are loyal to the prime minister’s zero-tolerance policy, we did not follow the path to give illegal gratification to the IDRA chairman,” Ahsan said in the press conference on Sunday.
On November 15, the IDRA fined Delta Life Tk 5 lakh for the insurer’s failure to submit the audited report for 2019, which, according to the company, was being delayed because one of the documents called the actuarial valuation report was not approved by the regulator on time.
Then on December 7, Delta Life Insurance filed a complaint with Anti-Corruption Commission for illegal gratification sought by the IDRA chairman along with the audio clip and transcript.
“He [the IDRA chairman] is intimidating the company to impose fine under different excuses. He is even threatening that he would suspend the board of directors and appoint an administrator,” Ahsan said in the press conference on Sunday.
Hossain did not respond to calls and text messages from Dhaka Tribune for his comment on the report, while Delta Life executives declined to comment beyond the press release sent out yesterday.
Shares of Delta Life, which has been listed since 1995, lost 13.6 per cent over the past month. On Thursday, they closed at Tk 72.2, down 2.3 per cent from the previous day.