The rules governing insurance laws in Bangladesh, both from ancient times and the contemporary day, are discussed in this article. In Bangladesh and in the South East Asian area in general, the idea of insurance is still in its infancy and its development is still in its early stages.
The Insurance laws of 2010 was enacted by the Parliament of Bangladesh in response to the requirements of the moment, with the intention of modernizing and reforming the insurance industry in Bangladesh.
The prior Insurance Act of 1938 was rendered ineffective as a result of the passage of the Insurance Act of 2010, which came into effect shortly after the passage of a new act to replace the old. Insurance laws is still not being realized to the appropriate level, despite the fact that it is such an essential topic in terms of the safety and security of enterprises and society as a whole, as well as the influence it may have over the long term.
At the moment, insurance is being used extensively and is gaining more and more admiration in both the personal life and the commercial sector as a key risk management instrument that is utilized to act as a barrier against the possibility of a contingent and unpredictable loss. When an insured person enters into an insurance contract, the insurer offers them financial protection against a loss that may be incurred as a result of the occurrence of an unpredictable event.
An Explanation of the Term Insurance laws
Insurance is a contract between two parties in which one party agrees to take on the risk of another party in exchange for a consideration known as a premium. That party also promises to pay a predetermined amount of money to the other party in the event of an uncertain event (death) or after the expiration of a certain period of time in the case of life insurance, or to indemnify the other party in the event of a non-specific event in the case of general insurance.
An Insurance laws policy is a contract in which one party, known as the insured or assured, insures with another party, known as the insurer, his property or life, or the life of another person in whom he has a pecuniary interest, or property in which he is interested, or against some risk or liability, by paying a sum of money as the premium.
In addition, the insured may also be referred to as the assured. In accordance with the terms of the contract, the insurer has agreed to compensate the insured for any damage that may be incurred by the other party as a result of the occurrence of a certain event.
Characteristics of the Insurance laws Policy Contract
Due to the fact that Insurance laws is a contract, it is necessary for it to fulfill the fundamental conditions that are associated with contracts.
- The parties concerned are required to reach a consensus on the matter.
In addition, the agreement must be backed by some kind of compensation.
- The parties must be able to enter into legally binding contracts
- The parties must freely assent to the terms of the agreement, and and
- For a contract to be considered legitimate, the item in question must not be in violation of any laws, any moral standards, or any public policy.
An Insurance laws contract is a contract of uberimae fidei, which means that it is founded on the principle of good faith. Therefore, it is necessary for both sides to disclose all of the relevant data.
The contract for insurance, on the other hand, is quite different from the contract for betting in a number of important respects. The insured will have an insurable interest in the subject matter of the insurance policy, and there will be a risk that the subject matter of the insurance covers will be damaged.
In order to indemnify the insured, the insurer will only be responsible for losses that occur immediately or for the final reason. The maxim “causa proxima non remota spectatur” is the basis for the idea that is being discussed. The scientific estimate of risks is the foundation upon which an Insurance laws contract is built.
When it comes to Insurance laws and double insurance
By way of a brief explanation, the term “double insurance” refers to the situation in which, after the formation of one insurance contract on a certain subject matter, another insurance contract is created on the same subject matter simultaneously.
Alternatively, when the insurance company believes that it would be difficult for it to bear the liabilities of losses due to this reason, it will establish an Insurance laws on that specific other in order to share the obligation. This is done with the intention of sharing the responsibility. “Reinsurance” is the term for this. This kind of insurance is permitted by the law as it is, but having two different forms of insurance, with the exception of life insurance, is nothing but irresponsible.
Legal and Administrative Structure in Bangladesh
Bangladesh has a long history of having an Insurance laws industry. There were a few firms that began their insurance operations in this area during the time when the British were in control of India. These companies were involved in both life and general insurance.
Not only that, but this company has also persisted in Bangladesh. Therefore, the presence of legislative regulations was essential in order to regulate insurance in Bangladesh. Regarding insurance, there is a legislation that is now in effect, and it is known as the Insurance Act of 2010.For instance, the Insurance Act of 1938 was one of the laws that were enacted during the immediate prior time dealing with insurance.
It is necessary to properly control and maintain every industry in order to guarantee that there will be no conflicts involved in the functioning of any nation. On March 3, 2010, the Parliament of Bangladesh approved two insurance laws in an effort to further improve the regulatory framework and make the sector operationally active.
This was done in conjunction with the aforementioned objectives. The Insurance laws of 2010 and the Insurance Development and Regulatory Authority (IDRA) of 2010 are the two new laws that went into force on March 18, 2010.
Acts of Major Importance Regarding Insurance:
38th Amendment to the Insurance laws
against the Insurance Rules of 1958 “
Bangladesh Insurance (Nationalization) Order 1972 v. Bangladesh Insurance
the Insurance Corporations Act of 1973 with regard to
1984 Ordinances Concerning Amendments to the Insurance Act
as well as the Insurance Act of 2010
The laws governing Insurance laws in Bangladesh are discussed in the following:
1938’s Insurance Act was passed.
The provisions of this Act included provisions concerning matters such as the definition of the insurer and the insured, the commission that is payable to agents, the licensing of agents, the appointments of staff, the registrar of policies and the registrar of claims powers of the controller of insurance,
the acquisition of surrender value by policy, the actuarial report, deposits, investments, loans, valuation of assets and liabilities, account and balance sheets, and other related matters. Additionally, the Act included rules that dealt with the administration of insurance companies, as well as the procedure for winding up insurance businesses. In the life insurance sector as well as the general insurance company, it was relevant.
Act of 1972 Concerning the Nationalization of the Bangladesh Insurance System
The goal of this order was to nationalize the insurance industry in Bangladesh by transferring all other insurance-related businesses to specific companies that had been founded specifically for this purpose. Additionally, the order was intended to provide for the regulation and management of the corporation’s commercial operations.
1972 saw the implementation of the Bangladesh Insurance Corporation (Dissolution) order.
An order was issued to dissolve the insurance companies, and this order was carried out.
Act of 1973 Concerning the Bangladesh Insurance Corporation
It was a statute that included 34 different parts. It was released to the public on June 23rd, 1973. The earlier four insurance organizations, namely Rupsa, Surma, Karnaphuli, and Teesta, were then dissolved in order to make way for the establishment of Jiban (Life) Bima Corporation and Sadharon (general) Bima Corporation. This was accomplished by the enactment of the legislation.
Act of 2010 Relating to Insurance
As a result of this Act, all of the prior laws that were related to Insurance laws were abolished. There are seven chapters and a total of 160 parts in this book. A law that has been revised. Specifically, it outlines the requirements that are relevant to insurers, insured parties, and the penalties for breaking the law.In addition to that, it offers provisions for Islamic insurance as well.
The Act of 2010 Concerning the Development and Regulation of Insurance
It is the responsibility of this Act to govern the control that is exercised over Insurance laws businesses, including their duties in relation to investments, taxes, and reporting.
In addition to these laws
The name of a few laws that are associated with the Insurance laws industry, such as the following, are included in the Insurance Act of 2010, which was passed in 2010.
a) The Act of 1993 Concerning Financial Insurance
(a) The Act of 2001 Concerning Cooperative Societies
The Government Securities Act of 1920 has been cited.
1994’s Companies Act is the second item.
Various Forms of Insurance
In accordance with the provisions of section 5 of the Insurance laws Act of 2010, there are two categories of insurance companies, which are as follows:
1) Insurance for one’s life and
2) Non-life insurance policies
The following is a short description of these two categories of insurance, which include Islamic insurance, fire insurance, and marine insurance.
Insurance on one’s life
An explanation of the definition of the Insurance laws contract may be found in the previous paragraph. When the life of the insured person is the subject of the insurance contract, the policy is referred to as life insurance. In such a contract, the insurer would compensate the insured in the event that the event that is even stated in the contract takes place. In the case of life insurance, the insurable interest must have been present at the time that the contract was entered into.
There are a variety of life insurance policies available, including whole life, endowment, limited payment, joint life, and others. There is the possibility of assigning life insurance policies to a third party who does not have an insurable interest in the insured person, and the assignment will be lawful. During the course of the investigation, it was discovered that the only person who could trial any offense for breaching any provision of the Insurance Act was a Magistrate of First Class.
Other than life insurance
The following are examples of non-life insurances:
The Insurance of Ships
One of the most significant sub-divisions of insurance is marine insurance. A marine Insurance laws policy is a kind of insurance contract in which the insurer makes a commitment to reimburse the insured against maritime losses, namely those that are related to nautical adventure, in the way and to the amount that is agreed upon among the parties.
The terms of marine insurance are not regulated by any legislation in Bangladesh where it is available. Generally speaking, the requirements of the contract legislation, as well as customary norms and tradition, are applicable in Bangladesh. The British Marine Insurance Act of 1906 is applied to some unique instances because of its provisions.
Assured against fire
Insurance that protects against any loss that may be incurred as a result of a fire. Therefore, the term “fire insurance business” refers to the business of executing contracts of Insurance laws against loss caused by or incidental to fire or other occurrences that are often included among the risks insured against in fire insurance policies. This is in contrast to the business of executing contracts of insurance in a manner that is incidental to another type of company.
Previously, the 1938 Insurance Act’s section 2 was the one that was responsible for regulating fire insurance.For the time being, the Act of 2010 is applicable. Fire Insurance laws may come in a variety of forms, including specialized, unvalued, and valued policies, among others.
Insurance in Islamic Law
The term “Islamic Insurance” refers to insurance policies that are operated in accordance with the principles and norms of Islam. In accordance with the provisions of Section 2(7) of the Insurance Act of 2010, the term “Islamic Insurance” refers to the insurance industry that operates in accordance with Islamic shariah law that is in effect.
On the other hand, there is a significant disagreement on the constitutionality (halal) of the insurance industry in Islam. Very few academics are of the opinion that it is entirely forbidden.
On the other hand, there are scholars who assert that Allah (ST) has sanctioned commerce and forbidden usury (riba). Therefore, in conclusion, it is possible to assert that there is confusion with respect to life insurance, but not with regard to non-life insurance, provided that the firm is dealing in usury fees, which is against the law.
Insurance for Mobile Devices in Bangladesh
The introduction of mobile Insurance laws in Bangladesh is one of the recent developments in the insurance industry. In order to fulfill the need, three of the most prominent mobile carriers operating in Bangladesh have implemented mobile insurance systems for their members who make monthly usage of more than 250 tk. Life insurance coverage will be made available to subscribers who fall into this category.
Authority for the Regulation of Insurance
The Insurance Development and Regulatory Authority (IDRA) is a powerful authority that was founded in accordance with the Insurance Development and Regulatory Authority Act of 2010. It is necessary for the insurance businesses that are functioning inside the nation to be controlled in accordance with comprehensive laws and rules, and they must also be overseen by this institution. An executive committee consisting of fifteen members, including a chairman and a vice-chairman, is in charge of its operations.
Association of Bangladeshi Insurance Companies
In accordance with the businesses Act of 1994, insurance businesses are considered to be corporations. By promoting, supporting, and protecting the interests and welfare of the member firms, the private insurance companies of Bangladesh have formed an organization.
This association’s purpose is to assist in the development of a healthy expansion of the insurance industry in Bangladesh. A total of fifteen people, including a chairman and a vice chairman, make up the executive committee that is responsible for its operation.
On the other hand, there is an organization known as the “Bangladesh Insurance Academy” that is dedicated to educating and training those who work in this industry.
In light of the fact that Insurance laws is playing an increasingly important part in the development of our economy, it is imperative that we place a greater emphasis on this sector in order to provide protection for individuals in general and society in particular. Bangladesh’s insurance industry is making substantial contributions to the country’s economic development via the risk-sharing activities it conducts, which in turn encourage investment in a wide variety of key industries.
As part of its efforts to foster a thriving insurance industry in our nation, the government has recently initiated a reform initiative in the context of the Insurance laws industry. As a first step towards accomplishing the goal, the Insurance Act of 2010 has been established, which is a successor for the former Insurance Act of 1938.
Additionally, the Insurance Development and Regulatory Authority Act of 2010 has also been passed in order to develop a more robust Insurance laws in Bangladesh. In this day and age of globalization, the domestic market need to be properly structured, and the legislative framework ought to be efficient in order to manage the altered conditions that have arisen in the organization of businesses and socio-economic organizations.