Express (August 15, 2011)
A tussle between insurers and its regulator over floating initial public offering (IPO) came to an end as the authorities concerned have said that new insurance rules in relation to floating shares will not be applicable to the 14 insurance companies.
The 14 life and non-life insurance companies, who took move to float IPOs earlier, will now apply to the Securities and Exchange Commission (SEC) as per their existing paid-up capital, Bangladesh Insurance Association said Sunday.
Under the new insurance act of 2010, insurance companies need Tk 300 and Tk 400 million paid-up capital for life and non-life insurance companies respectively to float IPOs.
The chairman of Bangladesh Insurance Association (BIA), Sheikh Kabir Hossain said: "The finance ministry has written to the SEC to take applications from the 14 insurance companies under old laws."
Mr Kabir, also chairman of the leading general insurance company Sonar Bangla, also said: "We've received a copy of the government directives as well."
He said the 14 companies took the move to float shares earlier when the Insurance Development and Regulatory Authority (IDRA) was not formed. "So the new laws are not applicable to those," he added.
Among the 14 companies, six are life insurance companies and they are Homeland Life Insurance, Sunflower Life Insurance, Padma Islami Life Insurance, Sun Life Insurance, Baira Life Insurance and Golden life Insurance.
The eight general insurance companies are Meghna Insurance, Bangladesh National Insurance, South Asia Insurance, Crystal Insurance, Desh General Insurance, Express Insurance, Islami Commercial Insurance and Union Insurance.
Some of them have applied to the SEC, some appointed issue managers and some were following other procedures in relation to floating shares in the market.
On the other hand, an official at IDRA said: "We want to implement the new laws."
He also said: "The existing laws do not allow the 14 companies to follow old methods."
Earlier, a tripartite meeting among insurers, IDRA and the government was held July 28 at the finance ministry with Banking Division secretary Shafiqur Rahman Patwary in the chair.
The meeting decided in principle that the 14 insurance companies would float shares under old laws and regulations.
The BIA chairman said the floating of shares of the 14 companies would now be expedited following the government directives.
"We think that listing of the companies with the bourses will help stabilise the market," BIA chairman added.
The companies registered under the Insurance Act of 1938 got approval with the paid-up capital for life insurance at Tk 75 million and general insurance at Tk 150 million.
No comments:
Post a Comment