Classification of Insurance business As per Section 5 of the Insurance Act, 2010 insurance business

could be explained:

 For the purpose of this Act there shall be two types of insurance business named as life insurance &
non-life insurance.

 Under this section life insurance means the insurance contract relating to human life which can be, by
rules, classified in various sub-class according to the provisions of sub-section (4) & (5).

 Under this section non-life insurance means all classes of insurance contract other than the human
life insurance contract which for carrying on the non-life insurance business effectively, by rules, can be
classified in various sub-class according to the provisions of sub-section (4) & (5).

non-life insurance- e.g. fire insurance/marine insurance/personal accident insurance etc.

Registration of Insurance business

Registration of Insurance company (section-8)

 No person shall begin to carry on any class of insurance in Bangladesh, unless he has obtained a
certificate of registration for the particular class of insurance business from the insurance Controlling
Authority. However, the Jiban Bima Corporation and the Sadharan Bima Corporation established under
the Insurance Corporation Act, I973 shall be considered to be having been registered under the Act for
the Purpose of carrying on their business.

 Every person willing to carry on any life insurance or Non-life insurance business in Bangladesh has to
apply in the prescribed form and procedure to the Authority for obtaining a registration certificate.

 ln the case of an insurer incorporated under the Insurance Act, 1938, who was carrying on any class of
insurance business in Bangladesh at the commencement of this Act, and is willing to continue the same
that insurer has to apply to the Authority in writing for obtaining a registration certificate with in 6 (six)
months from the commencement of this Act

.  An applicant applying for registration under this section for thereof has to make payment of
prescribed fee.

 Every application for registration shall be accompanied by the following papers, documents and
information:

 Where the applicant is a company, a certified copy of its memorandum and articles of association, the
name, address and occupation of its directors and their Tax Identification Numbers, if any.

 Where the applicant is an insurance company incorporated under the Insurance Act, 1938, the full
address of its Principal office in Bangladesh, the names and Tax identification Numbers, if any of its
directors and manager and their contact address.

 ln the case of an insurer having its Principal place of business or domicile outside Bangladesh, the
documents specified in clause (a) of section 114.

 Where the applicant is a Co-operative society, the names, addresses and Tax ldentification Numbers,
if any, of its members and address of its principal office.
 A statement of the class or classes of insurance business done or to be done and a statement that the
amount required to be deposited section 23 or by section 119 before application for registration is
made, has been deposited together a certificate from the Bangladesh Bank showing the amount so
deposited.

 Where the provisions of section 21 or section 118 apply, a statement duly certified by an auditor
showing the total paid up capital or the total working capital of the insurer and a declaration verified by
an affidavit made by the Principal Officer of the insurer authorized in that behalf that provisions of those
sections as to paid up capital or working capital as the case may be has been complied with.

 A certified copy of the published prospectus, if any, and the standard policy forms of the insurer and
statement of premium rates, advantages, terms and conditions to be offered in connection with
insurance policies together with a certificate in connection with life insurance business by an actuary
that such rates, advantages, terms and conditions are workable and sound.

 The receipt showing payment in the prescribed manner of the fee as prescribed for any class or sub
class of insurance business under this Act.

 Any other documents, paper or information as prescribed under this Act.

 Every application made under this section shall be accompanied by a declaration signed by the
applicant and verified by an affidavit stating that all statements as supplied with the application are true
and correct & true After getting the application under sub-section-3 of this section of this Act, the
authority shall make necessary inquiry and investigation regarding the documents/submitted with the
application to be clear the same.

Provision of restrictions for registering the same insurer for life and non-life insurance business
(Section-13)

No person shall be registered as an insurer:

 for any life insurance business if he is registered for any class of non-life insurance business; or

 for any non-life insurance business if he is registered for any class of life insurance business.

Accounts, Audit, Actuary report and Statements

Audit (Section-28)

 The balance sheet, profit and loss account, and revenue account of every insurer in respect of the
insurance business transacted by him in Bangladesh shall, unless they are subject to audit under the
Companies Act, be audited annually by one or auditors in accordance with the provisions of this Act.

 An auditor employed under the provision of this section shall have authority to exercise such powers
and functions as is given to an auditor under section 213 of the Companies Act.

Special audit (Section-29)

 Whatever may exist in other provisions of this law, the Authority may from time to time order
auditing of all insurance business related transactions, records, documents of any or all insurance
companies doing insurance business in Bangladesh under the provisions of this Act. It may be mentioned
here that an auditor appointed under this section shall not be the same person appointed as auditors
under section 28.

 An auditor appointed under this section shall have a right of access to all such books of account,
registers, vouchers, correspondence and other documents of the insurer and shall be entitled to require
from the directors and officers of the insurer such information and explanation as may be necessary for
the performance of his functions and duties under this section.

 An auditor appointed under this section shall prepare an audit report within a maximum period of
four months of its appointment and shall submit the audit report to the Authority in four copies.

 An auditor appointed under this section shall be paid by the insurer such fee as may be prescribed by
the Authority.

Actuary report and briefings (Section-30)

 Every insurer carrying on life insurance business shall once at least in every one year cause an
investigation to be made by an actuary for valuation of his liabilities according to the prescribed rules
and regulation including the financial condition of the life insurance business and shall cause an abstract
of the report of such actuary to be made in accordance with the chart and procedure prescribed in the
provisions for investigation.

Provided that, subject to the special condition of the insurer the authority may at any date within two
years of completion of previous investigation give permission for investigation under this section.

 The provisions of sub-section (1) regarding the making of an abstract shall apply whenever at any
other time an investigation into the financial condition of the insurer is made with a view to the
distribution of profits or an investigation is made of which the results are made public.

 There shall be appended to every such abstract as is referred under this section a certificate signed
by the principal officer of the insurer that full and accurate particulars of every policy under which there
is a liability either actual or contingent have been furnished to the actuary for the purpose of the
investigation.

 There shall be appended to every such abstract a statement in accordance with the regulations of the
life insurance business in force at the date on which the accounts of the insurer are made up for the
purposes of such abstract:

Provided that, if the investigation, referred to in sub-sections (1) and (2) is made annually by any insurer,
the statement need not be appended every year but shall be appended at least once in every three
years.

Solvency Margin, Loan and Management of Insurance business

6.1 Conditions to be fulfilled regarding solvency margin (Section-43)

'Solvency Margin' refers to a certain amount of reserve fund maintained by an insurer as determined by
the Act. Conditions to be fulfilled for solvency margin are as follows:
 Every insurer shall maintain solvency margin for its insurance business to an amount and in the
manner as provided by in the Act.

 lf an insurer at anytime fails to maintain solvency margin as Per sub-section (l) above that insurer shall
submit a work plan to the Authority for making good the shortfall within the maximum period of three
months of the issuance of the order of the Authority in this regard.

 The insurer shall only implement the work plan approved by the Authority and one that is found
inadequate by the authority should be revised by the insurer for approval. For the purpose of examining
or determining whether the solvency margin as determined by the Authority has been fulfilled or not,
the Authority shall have the right to inspect and verify the assets and liabilities of an insurer and collect
other necessary information and the insurer shall be bound to comply with the orders issued in this
regard by the Authority. If he fails to do so within two months from the receipt of the order shall be
deemed to have made default in preserving solvency margin and in that case necessary action shall be
taken under section 95 of this Act.

 Every insurer transacting life insurance business shall submit, a statement attested by an actuary,
showing the specific solvency margin maintenance related information of a life insurer in the manner
prescribed by the Authority.

 For transacting non-life insurance business, every insurer shall submit a statement attested by an
authorized auditor showing the specific solvency margin maintenance related information of a nonlife
insurer in the manner prescribed by the Authority.

Restrictions in granting loan, advance and financial benefits (Section-44)

 No insurer shall grant any loan, advance or other financial benefits against the security of its own
share.

 No insurer shall grant to or any member of the family of any director, manager, actuary, auditor or
officer of the insurer any loan or temporary advance except a loan on life policy issued by the insurer
within the surrender value.

 Except with the prior approval of the Board of Directors and consent of the Authority no insurer shall
grant any loan or temporary advance to any firm or company in which any director, manager, actuary,
auditor or officer of the insurer or member of the family of such director, manager, actuary, auditor or
officer has interest as proprietor, partner, director, manger or managing agent.

 The concern director shall not vote at or otherwise participate in the proceedings of the meeting of
the Board considering the grant of any such loan or advance.

 The restrictions as mentioned under sub-section (l) and (2) above shall not be applicable or advances
granted by an insurer to a banking company or to a subsidiary company insurer or to any insurer which
is a subsidiary company.

 No restrictions as mentioned in sub-section (l) shall apply to any stipend paid to any insurance agent,
broker or employer of agents while he is undergoing a course of training approved by the Authority.
 No insurer shall grant to any employee, insurance agent or employer of agents any loan or temporary
advances except-

 loans on life policies issued by him to an employee, insurance agent or broker or employer of agents
with in their surrender value;

 loans on mortgage of immovable property

 loans for the purchase of conveyance to an employee, insurance agent or employer of agents
provided that the concerned employee or agent has served the company continually for such period as
may be decided by the Board of Directors and the conveyance purchased is mortgaged to the insurer.

 temporary advances to an employee, insurance agent or employer of agents not exceeding four
months’ salary in case of employees; in case of insurance agents, the renewal commission earned by
him during two years immediately preceding the date of application for the advance or a sum not
exceeding the fixed determined amount if he has not earned renewal commission.

Double Insurance vs. Re-insurance

 If the same risk and the same subject are insured by the policy-holder with more than one insurer, it is
called double insurance. Re-insurance means the transfer of the part of the risk by the insurer.

 If there are double insurances of properties, the loss will be shared by all the insurers. In the case of
life insurance all the insurers are liable. In re-insurance, the re-insurer is entitled to get a proportionate
part of the premium, and will be liable for a proportion of part of the loss.

 The re-insurer is liable only to the first insurer. In double insurance each insurer is liable directly to the
policy-holder.

 Double insurance is a method of assuring the benefit of insurance. In the case of life insurance, the
insured may have any number of policies and for any amount. Re-insurance is a method of reducing of
the risk of the insurer.

The following rules apply in the case of double insurance:

 Life: no limit. In the case of life insurance there may be any number of policies for any amounts. A
man is entitled to place any value he likes upon his life and therefore upon death, all the policies are
payable whatever the total amount may be.

 Property: not more than actual loss. A person is free to insure his property with any number of
insurers. But in case of loss occurring, he will not be allowed to recover more than the actual loss from
all the insurers together. This amount will be shared between the insurers in proportion to the value of
each insurer’s policy. If any one of the several insurers pays the whole loss, he is entitled to contribution
from the other insurers.

SEC Ordinance 1969

No. BSEC/CMRRCD/2006-158/208/Admin/81:Whereas, the Bangladesh Securities and Exchange

Commission (hereinafter referred to as the “Commission”) deems it fit that the consent already
accorded by the Commission, or deemed to have been accorded by it, or to be accorded by it in future,
to the issue of capital by the companies listed with any stock exchange in Bangladesh, shall be subject to
certain further conditions on financial reporting and disclosure in order to enhance disclosure and
transparency in the interest of investors and the capital market;

Now, therefore, in exercise of the power conferred by section 2CC of the Securities and Exchange
Ordinance, 1969 (XVII of 1969), the Commission hereby imposes the following further conditions to the
consent already accorded by it, or deemed to have been accorded by it, or to be accorded by it in future,
to the issue of capital by the companies listed with any stock exchange in Bangladesh, namely: -

Preparation of Financial Statements.

- The financial statements (annual or interim) of the company shall be prepared in accordance with the
Securities and Exchange Rules, 1987 as well as the provisions of International Accounting Standards (IAS)
or International Financial Reporting Standards (IFRS) as applicable in Bangladesh or as per requirements
under the Financial Reporting Act, 2015 as the case may be, unless otherwise specified in the referred
Rules and other rules related to the issue or issuer of securities.

Auditing of Financial Statements. –  The company shall get its annual financial statements or, where
applicable, interim financial statements, audited by duly appointing an auditor or audit firm enumerated
in the panel of auditors as declared by the Commission from time to time. Explanation: In this sub-
condition, “panel of auditors” means any partnership firm of Chartered Accountants which is in the
panel of the Commission within the meaning of the Bangladesh Chartered Accountants Order, 1973
(President’s Order No. 2 of 1973) as per the guidelines as prepared by the Commission from time to
time in this regard.

 The company shall not appoint any firm of chartered accountants as its statutory auditors for a
consecutive period exceeding three years.

 The auditor or audit firm shall not also be eligible for performing the auditing of financial statements
of the company for a consecutive period exceeding three years.

 The chartered accountant or auditor or partner of an audit firm shall make the audit report in
accordance with the International Standards on Auditing (ISA) applicable in Bangladesh ensuring the
provisions of the Companies Act, 1994, the Financial Reporting Act, 2015, securities laws and other
relevant laws.

 The chartered accountant or auditor or partner of the audit firm shall have to follow or ensure the
compliance with the provisions or professionalisms or practices or ethical requirements of the
International Standards on Auditing (ISA), system of quality control requirement under the International
Standard on Quality Control (ISQC), the Code of Ethics for Professional Accountants and other relevant
standards and pronouncements as applicable in Bangladesh in conduction of auditing and issuing audit
report.

 The company shall not get its financial statements audited by any firm of chartered accountants or
auditor which or who is convicted for any offence related to securities or stock exchange or financial
matter under any law, or which or who has been declared ineligible by the Commission for acting as
auditor of any issuer under sub-rule (3B) of rule 12 of the Securities and Exchange Rules, 1987 or against
whom any disciplinary action has been taken by the Institute of Chartered Accountants of Bangladesh
(ICAB), or the Financial Reporting Council (FRC).

Adoption of Quarterly Financial Statements.

 The company shall notify the Commission and the stock exchange in advance the date and time of its
board of directors’ meeting specially called for consideration or adoption of its quarterly financial
statements and for declaration of any entitlement including interim dividend for the shareholders
before 3 (three) working days of holding such meeting.

 The board of directors of the company, while considering or adopting any quarterly financial
statements, shall, in the same board meeting, declare the net asset value (NAV) per share, earnings per
share (EPS) and net operating cash flows per share (NOCFPS) and the board shall not take any decisions
with regard to recommending interim dividend for the shareholders on the basis of said financial
statements without being duly audited and without declaring the shareholders who shall be entitled to
such dividend:

Submission of Quarterly Financial Statements.

 The company excepting the life insurance company shall, within 45 (forty-five) days of end of the first
quarter (Q1) of the financial year, submit quarterly financial statements (audited or unaudited) to the
stock exchange and the Commission, and publish the same in at least two widely circulated national
dailies, one in Bengali and the other in English as well as in one online daily news site: Provided that in
case of significant deviation in any parameter between the quarterly periods, the company shall provide
reasons therefor: Provided further that life insurance company shall, within 90 (ninety) days of end of
Q1 of the financial year, submit quarterly financial statements (audited or unaudited) to the Commission
and the stock exchange, and publish them in the same manner as above.

 The company shall, within one month of end of the second quarter (Q2) of the financial year, submit
quarterly financial statements (audited or unaudited) to the Commission and the stock exchange, and
publish the same in at least two widely circulated national dailies, one in Bengali and the other in English
as well as in one online daily news site: Provided that in case of significant deviation in any parameter
between the quarterly periods, the company shall provide reasons therefor.

 The company shall, within one month of end of the third quarter (Q3) of the financial year, submit
quarterly financial statements (audited or unaudited) to the Commission and the stock exchange, and
publish the same in at least two widely circulated national dailies, one in Bengali and the other in English
as well as in one online daily news site: Provided that in case of significant deviation in any parameter
between the quarterly periods the company shall provide reasons therefor. Disclosure of quarterly (Q1,
Q2 and Q3) financial statements shall be in accordance with the provisions of the Securities and
Exchange Rules, 1987 as well as the provisions of the International Accounting Standards (IAS) or
International Financial Reporting Standards (IFRS) as applicable in Bangladesh, as the case may be,
unless otherwise specified in the referred Rules along with special disclosures on:

 detailed break-up or composition of shareholders’ equity: paid-up capital, share premium and
number of ordinary shares with face value and date of issue, preference share capital, number of
preference shares with face value and date of issue, conversion features of preference shares (if any)
with conversion date, conversion features of any other securities (if any) with conversion date, detailed
break-up of reserve and surplus;

 calculation of net asset value (NAV) per share;

 calculation of basic and diluted earnings per share (EPS);

 calculation of net operating cash flows per share (NOCFPS); and

 in addition to disclosures on direct method of cash flows, a reconciliation of net income or net profit
with cash flows from operating activities making adjustments for non-cash items, for non-operating
items and for the net changes in operating accruals.

Submission of Annual Financial Statements

 Annual financial statements of the company except a life insurance company shall be audited within
120 (one hundred and twenty) days from the date on which the company’s financial year ends and a
copy of such audited financial statements shall be submitted to the Commission and the stock exchange
within fourteen days thereof: Provided that a listed life insurance company shall, within 30th June of
Gregorian calendar, submit the audited annual financial statements to the Commission and the stock
exchange: Provided further that on an application filed by the company under rule 12(3A) of the
Securities and Exchange Rules, 1987, the Commission may, on good cause shown and only under
extreme circumstances, extend the time for auditing the annual financial statements or submission of
the annual financial statements to the Commission, as the case may, as it deems fit.

 Disclosure of annual audited financial statements shall be in accordance with the provisions of the
Securities and Exchange Rules, 1987 as well as the provisions of the International Accounting Standards
(IAS) or International Financial Reporting Standards (IFRS) as applicable in Bangladesh, as the case may
be, unless otherwise specified in the referred Rules along with special disclosures on:

 detailed break-up or composition of shareholders’ equity: paid-up capital, share premium and
number of ordinary shares with face value and date of issue, preference share capital, number of
preference shares with face value and date of issue, conversion features of preference shares (if any)
with conversion date, conversion features of any other securities (if any) with conversion date, detailed
break-up of reserve and surplus;

 calculation of net asset value (NAV) per share;

 calculation of basic and diluted earnings per share (EPS);

 calculation of net operating cash flows per share (NOCFPS); and

 in addition to disclosures on direct method of cash flows, a reconciliation of net income or net profit
with cash flows from operating activities making adjustments for non-cash items, for non-operating
items and for the net changes in operating accruals

Authentication of Financial Statements. –  Any unaudited financial statements of the company shall be
authenticated on behalf of the board of directors with the signatures of the Chief Executive Officer
(CEO) or Managing Director (MD), Chief Financial Officer (CFO) or Head of Finance and Accounts and the
Company Secretary (CS) including at least two directors of the board until and unless otherwise required
by applicable primary regulators.  Any audited financial statements of the company shall be
authenticated as per the provisions of the Companies Act, 1994 and requirement of the Commission as
well as requirement of primary regulator of the issuer, if any. Posting of Financial Statements in the
Website. – The company shall make available the detailed financial statements (annual or quarterly) in
its website as well as in the website of the stock exchange through link arrangement and in case of
quarterly (Q1, Q2, Q3) financial statements, the company shall include the following paragraph in bold
letters at the end of the quarterly financial statements published in the newspapers: “The details of the
published quarterly (Q1 or Q2 or Q3) financial statements are available in the website of the company.
The address of the website is”. Submission of Annual Report.  The company shall furnish a copy of its
annual report in soft form or printed form as the case may be, including all relevant annual audited
financial statements, management’s discussion and analysis, report or certificate on compliance of the
Corporate Governance Code and Directors’ Report along with the notice of the annual general meeting,
etc., to the shareholders at least 14 (fourteen) days before the annual general meeting of the
shareholders of the company at which the annual report is to be laid before them and shall
simultaneously furnish 30 (thirty) printed copies of such reports to the Commission and to the stock
exchange.  The company shall publish its annual report in its website linked with the stock exchange
within at least 14 (fourteen) days before the annual general meeting of the shareholders of the
company, with proper notification, specifying the web address, in two widely circulated national dailies
(one in Bengali and one in English) as well as in one online daily news site for general information of the
shareholders: Provided that the company shall also send the annual report to the e-mail addresses of
the shareholders available in their beneficial owner (BO) accounts with the depository.  The company
shall also print sufficient number of annual reports so that any shareholder may collect the printed copy
of the annual report from the registered address of the company or its Investors’ Relation Department
or from the AGM venue if any shareholder requires in writing beforehand