Jiban Bima Corporation
Jiban Bima Corporation (JBC) established on 14 May 1973 under the Insurance Corporation Act 1973 with an authorised capital of Tk 200 million divided into 2 million ordinary shares of Tk 100 each. The paid up capital of the corporation is Tk 50 million fully subscribed by the government. The corporation is engaged in life insurance business under the provisions of the Insurance Act 1938, Insurance Rules 1958, Insurance Corporation';s Rules 1977, and related other laws enforceable in Bangladesh.
The total number of insurers registered in Pakistan up to 1968 was 81, of which 40 were constituted or incorporated in Pakistan and the remaining 41 in other foreign countries. Of the 40 indigenous companies, 10 were registered in East Pakistan and 30 in West Pakistan. Of the foreign companies, 21 originated in the UK, 8 in India, 5 in USA, 3 in New Zealand and one each in Australia, Canada, France, and Hong Kong. Ten of the 40 Pakistani companies were exclusively engaged in life insurance business, 21 in life and other business, and 9 in other business only. Foreign companies concentrated more on non-life insurance. Two of them did life insurance business only, another one did life as well as general insurance.
The number of insurance companies that had business in East Pakistan was 75, of which 10 were locally incorporated ones. Following the independence of Bangladesh in 1971, both life and general insurance business in the country was nationalised under the Bangladesh Insurance (Nationalisation) Order 1972. Five corporations were established to absorb, own and control the businesses of the 75 existing insurance companies and these new corporations were Bangladesh Jatiya Bima Corporation, Karnafuli Bima Corporation, Tista Bima Corporation, Surma Jiban Bima Corporation and Rupsa Jiban Bima Corporation. In 1973, the government decided to integrate the life and general insurance companies into two corporations, and accordingly, the Jiban Bima Corporation was formed to take over the undertakings of the Surma Jiban Bima Corporation and Rupsa Jiban Bima Corporation. The Karnafuli Bima Corporation and the Tista Bima Corporation were integrated into sadharan bima corporation. In that year, the government also decided to merge the Bangladesh Jatiya Bima Corporation with the newly formed Sadharan Bima Corporation.
Until 1985, Jiban Bima Corporation was the only institution to handle life insurance business in Bangladesh. Through the Insurance (Amendment) Ordinance 1984 and Insurance Corporations (Amendment) Ordinance 1984, the government allowed the private sector to establish insurance companies. Up to December 2000, at least 17 private sector insurance companies came into being and made the life insurance business competitive, which however, had little impact on the business performance of the Jiban Bima Corporation.
The corporation offers 15 different types of life insurance schemes. These are whole life assurance, endowment assurance, child protection policy, children endowment, anticipated endowment assurance, pension scheme policy, single payment policy, mortgage protection policy, group term insurance policy, group endowment policy, group variable endowment policy, group pension policy, grameen bima policy, joint life endowment policy, and progressive premium policy.
Premium income of the corporation was Tk 2,447 million in 2007 marking an increase 63% over premium income in 2001. Following is an account of the gross premium income structure, proportion among expenses, operating profit and net income, types of policies sold and the sums assured by types, and the management structure of the corporation presented for the year 1998. The figures are representative enough since although the absolute figures have changed over time, the relative proportions remained the same.
In 1998, the corporation earned gross premiums of Tk 1,402.8 million, which comprised first-year premiums (Tk 401.2 million), renewal premiums (Tk 913.0 million), and group insurance premiums (Tk 88.6 million). It paid Tk 493.7 million to settle life insurance claims under various schemes. Business management expenses of the corporation stood at Tk 629.2 million and it earned operating profits of Tk 279.9 million. The net incomes from its investments and other sources were Tk 189.2 million.
In 1998, the corporation sold 65,086 new individual policies and the sum assured was Tk 5,723 million. The number of policies on female lives was 10,244 and the sum assured in these policies was Tk 700.2 million. The number of policies written in the rural areas under its rural business scheme was 44,209 with a sum assured of Tk 3191.4 million. The corporation issued 47,925 policies with the amount assured of Tk 3,824.4 million under its non-medical business scheme in the year. The total number of organisations and persons covered, sum assured and premiums earned under the Group Insurance Scheme figured 340 organisations, 707,900 persons, Tk 1,7575.6 million and Tk 88.6 million respectively.
At the end of the year 1998, the corporation had 315,735 individual life policies in force with a sum assured of Tk 23,742 million. Of these policies 310,555 with an amount assured of Tk 23,727.4 million were underwritten by the corporation itself and the remaining, with a sum assured of Tk 14.6 million, were underwritten by the company';s old units. Conversely, a total number of 43,641 individual policies with a sum assured of Tk 3,047.0 million were lapsed during the year.
The corporation has Re-Insurance Treaty with Swiss Re-Insurance Company of Switzerland and Munich Re-Insurance Company of Germany. The retention limit in respect of underwritten risk of the corporation up to 1998 was Tk 1 million. Jiban Bima Corporation is also working as a re-insurer of 2 private Life Insurance Companies of Bangladesh.
On 31 December 1998, the book value of investments and loans of the corporation including term deposits with banks stood at Tk 3,328.6 million and the investment portfolio included loans on mortgage of property, loans on insurers policies, investment in government securities, debentures of companies, bridge finance advance, investment in shares of companies, house property and land, and term deposit with banks. On that date, the total assets of the corporation were valued at Tk 4,340.49 million.
The management of the corporation is vested in a 7-member board of directors appointed by the government. The managing director is the corporation';s chief executive. He is assisted by 2 general managers, 6 deputy general managers and 2 assistant general managers. In December 1998, the corporation had 1,772 employees. The corporation has 8 divisions in its head office at Dhaka and 19 zonal/regional offices.
On 31 December 1998, the corporation had 30,747 active agents. It has no full time actuary and it takes services of an actuary of Pakistan. It has a Claims Review Committee under the supervision of the Technical Affairs Division and the committee, upon request of claimants, reviews the declined claims and makes recommendations for payment on ex-gratia basis. [S M Mahfuzur Rahman] [Rahman, S M Mahfuzur Professor of International Business, Dhaka University]
