Sunlife asked to pay claims by 15 June

The Insurance Development and Regulatory Authority (IDRA) has directed Sunlife Insurance Company Limited verbally to pay half the claims of its customers within 15 June.

SM Shakil Akhter, IDRA executive director and spokesman, said on Tuesday they would issue a letter to the company in this regard.

He also said IDRA would take legal action if the company failed to pay the claims within the stipulated time.

IDRA summoned senior officials of the company on Tuesday in the wake of recent media reports on non-payment of claims. It ordered the company to pay the available cash, supposed to be enough to pay back half of the clients, as soon as possible and report to it within 15 June.

According to IDRA officials, the company's Managing Director Mohammad Nurul Islam has admitted that mature life insurance policies worth around Tk70 crore remains unpaid and the firm currently has Tk35-40 crore in cash and cash equivalent assets.

Nurul did not respond to The Business Standard's request for comments.

In March this year, a Kushtia court issued arrest warrants against five people, including the company's Chairperson Professor Rubina Hamid, in connection with nine lawsuits filed by clients who had not received the claims.

Rubina is the sister of Health Minister Zahid Maleque. None of the five has been arrested so far.

Bad investments and non-compliant expenses have put the company's life fund in a bad state. It is now unable to retrieve the necessary cash from the fund.

The regulator, in February this year, appointed two of its officials as observers in the life insurer's board. But it retreated from its decision within two days allegedly due to unknown pressure.

According to the company's January-September 2020 report, its consolidated life revenue accounts decreased by Tk10.21 crore to reach Tk181.94 crore while investment declined by Tk5.27 crore.

It has not declared any cash dividend for its shareholders since its listing in 2013. Its current paid-up capital is Tk35.76 crore.

The last trading price of the company's shares at the Dhaka Stock Exchange was Tk34 each on Tuesday.

Till April this year, sponsors and directors jointly held 40.80% of shares while institutional investors owned 26.73% and general investors 32.47%.

Sunlife Insurance raised Tk12 crore from the stock market through an initial public offering in 2014.

It is mainly engaged in individual life, Islamic individual life, and group life insurance business.