Life insurance Corporation (LIC) of India has been cleared to do business in Bangladesh, intensifying competition in the insurance market. Bangladesh Insurance Development and Regulatory Authority (IDRA) Chief Shefaq Ahmed told media persons today that a letter of consent has been given to LIC with certain conditions.
They will be able to start operations once the conditions are fulfilled. Shefaq said the LIC will start business as the joint venture entity called LIC Bangladesh Ltd with a paid-up capital of 1 billion Takas with LIC holding half of it.
The rest will be held by Bangladesh which will be raised in the capital market and local entrepreneurs. LIC’s proposal to operate in Bangladesh was rejected by Bangladesh Insurance Development and Regulatory Authority in 2013 citing small capital base.
Following an appeal by LIC, the IDRA cleared the proposal with a substantially higher capital base. Insurance experts say the move will stiffen competition in the insurance market and benefit customers.
Bangladesh has over 77 local insurance companies in the market, the only other foreign insurance company is a US-based company which operates as a branch office, and not as a registered company.