Regulatory nod a must for foreign travel of insurance officials

Insurance companies have been asked to take prior regulatory approval in case of financing foreign travels of its officials.

Moreover, every insurer has to explain how any company-sponsored foreign travel of an official will benefit the company, estimated spending and short history of the traveller's last five years' overseas visit.

The Insurance Development and Regulatory Authority (IDRA) made the call through a circular today as part of efforts to reduce management and ancillary spending of insurance companies.

The IDRA came up with such initiative as it found an increased tendency of some insurers to spend more than their management cost limit set by the insurance watchdog.

The directors and other officials of the insurer are spending a huge amount of money by participating in various events like conferences and seminars at home and abroad, it said in the circular.

Such violation adversely hurts the insurer's financial capacity, the circular read.

Abdul Majid, director of law at the IDRA, signed the directive and sent it to the CEOs and managing directors of all insurance companies.

Eighteen non-life insurance companies spent more in 2022 on management expenses than allowed, leaving a negative impact on their overall business and eroding their capacity to settle claims, according to a report of The Daily Star published today.