Insurance performs multifarious functions, some of which are incidental to the individual class of business, viz., marine, fire, life, and accident, and some of which are functions of general nature like equitable distribution of loss, reduction of loss through rating principle, assistance to business enterprise, investment, inspection services, etc. common to, or ancillary to, the business of insurance as a whole. The development of insurance in Bangladesh are discussed below:
Development of insurance in Bangladesh
Insurance is not a new idea or proposition to the people of Bangladesh. During the British rule in the then India, some insurance companies started transacting insurance business, particularly life, in this part of the world and gained momentum.
There were about 49 companies transaction both life and general insurance businesses during the pre-liberation period.
With the emergence of the People’s Republic of Bangladesh, the Government, in order to make available the fruit of liberation to the general masses, nationalized the insurance industry in 1972 by Presidential Order No. 95, more specifically known as the Bangladesh Insurance (Nationalization) Order 1972.
By virtue of this order, save and except postal life insurance and foreign life insurance companies (other than Pakistani companies), all companies and organizations transaction all types of insurance business in this country come under the nationalization.
Five insurance corporations were initially established, viz., Jatiya Bim corporation, Teesta Bima Corporation, Karnaful, I Bima Corporation, Rupsa Bima Corporation, Surma Bima Corporation.
As per this order, Teesta and Karnafuli were made responsible for the general insurance business, and Rupsa and Surma were made responsible for the life insurance business. The Jatiya Bima corporation was a central corporation to supervise and control the activates of these four corporations.
It was soon observed that the unnecessary administrative expenses for maintaining these four corporations and an apex institution at the top outweighed the advantages of limited competition.
Therefore on 14th May 1973, the structural arrangement under nationalization was changed by act. VI, 1973. The five corporations were abolished and, instead, the corporations were established, viz.
- Sadharan bima Corporations
- Jiban Bima Corporation
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