Report on

Compliance with Company

Act 2010
(Comparison between Two Companies)

Submitted To

Submitted By

Submission Date: 28/03/2017

United International University

Company Act 2010
Parliament on 03 March 2010 passed two insurance laws in a bid to further
strengthen the regulatory framework and make the industry operationally
vibrant. The new laws, came in to effect on 18 March 2010, are Insurance Act
2010 and IDRA 2010.
There are 77 insurance companies operating in the country and they need to
be regulated under comprehensive laws and guidelines and supervised by a
strong regulatory authority. The Insurance Act 2010 said the sector needs to
be managed properly and he strengthened by reducing business risks, and
local and international insurance laws need to be harmonized considering the
socio-economic aspect of the country, and protect the interest of policy
holders and other beneficiaries.

Pragati Life Insurance Ltd.

Established in 1986, Pragati Life Insurance Limited has been in the financial
sector operating services such as underwriting, trusteeship to the debenture
issues, trading of shares and other securities at both primary and secondary
markets. The shares of the Company are listed in the Dhaka and Chittagong
stock exchanges. It is one of the leading General Insurance companies in
Bangladesh.
Multimode Group, CEO, Mr. Abdul Awal Mintoo, currently is the Chairman of
Pragati Life Insurance Limited.

Delta life Insurance Ltd.

Delta Life Insurance Co. Ltd. established mainly through the initiative of a
group of Bangladeshi professionals then working abroad along with a few
enthusiastic local entrepreneurs, started its operation in December, 1986
after the Government of Bangladesh allowed the private sector to operate in
the insurance sector in 1984 to carry on the business of insurance in the
Private Sector. Delta introduced an array of conventional life and group
insurance products - many of which were the first in Bangladesh. For the first
time, health insurance products were also introduced by Delta Life. But more
importantly, in fulfilment of the avowed commitment towards social
development, Delta Life for the first time not only in Bangladesh but
probably in the World, devised and introduced micro-life insurance-cum-
savings products specially suited to the needs and pockets of poor people of
the country who constitute more than 80% of the people of Bangladesh.

Capital Act:
The authorized capital of Jibon Bima Corporation shall be a minimum amount
of Taka thirty crore.

Pragati Life Insurance Ltd. Delta life Insurance Ltd.

Authorized capital of pragati The authorized capital of Delta life
Insrance ltd. is insurance co. is tk. 5,00,00,00,000.
2,00,00,00,000

Investment Act:
Subject to the provisions of the Insurance Act, 1938 (Act IV of 1938), each
Corporation may invest its funds in such manner as its Board may think fit.

Pragati Life Insurance Ltd. Delta life Insurance Ltd.

The total investment income made Investments are made in accordance
by with the provision of the Insurance
Pragati Life Insurance Limited rose Act 1954 and the notifications issued
to Tk. 344.07 million in 2015 from by the Controller of IDRA in this
Tk. 336.07 million in 2014 context time to time.
registering an increase of 2.38%. Investment has a positive growth of
2.16%.investment income increased
from tk 300.28 crore in 2014 to
306.76 in 2015.
Accounts and Audit Act :
Each Corporation shall maintain proper accounts and shall, at the expiry of
each year, prepare in the prescribed form with reference to that year a
balance sheet, a profit and loss account and revenue accounts in respect of
such class of insurance business together with such other abstracts and
statements as may be prescribed.

Every auditor appointed under sub-section 92) shall be given a copy of the
annual balance sheet and other accounts of the Corporation and shall
examine it together with the account books and vouchers relating thereto;
and shall have a list delivered to him of all books kept by the Corporation,
and shall at all reasonable times have access to the books of accounts and
other documents of the Corporation, and may in relation to such accounts
examine any Director or officer of the Corporation.

Pragati Life Insurance Ltd. Delta life Insurance Ltd.

Company has followed GAAP for
their accounting assumptions. It
covers one financial year from 1
January, 2015to 31 December,
2015 of the calendar year.
The preparation of financial
statements in confirmatory with the
GAAP standards require that the
companys management make
estimates and assumptions that
affect the reported amounts of
income and expenses for the year
and reported balances of assets and
liabilities.
The financial statements of the
company cover one financial year
from 1 January, 2015to 31 December,
2015 of the calendar year.
 S. K. BARUA & CO. chartered SHAFIK BASAK & CO. Chartered
accountants conducted their audit accountants conducted their audit in
in compliance with BSA. accordance with BSA. An audit also
includes evaluating the
appropriateness of accounting
principles used and the
reasonableness of accounting
estimates made by management, as
well as evaluating the overall
presentation of the financial
statements of the company.

Re-insurance Act:
Every, insurer registered and carrying on insurance business in Bangladesh
shall reinsure, on generally acceptable terms and conditions, such portion of
his insurance business as he cannot retain on his own account

The whole or any portion of the re-insurable life insurance business may be
re-insured with any insurer outside of Bangladesh.

Pragati Life Insurance Ltd. Delta life Insurance Ltd.

The Company maintains This re-insurance represent
reinsurance arrangement with provisional amount payable to re-
Munich Reinsurance Company of insurer for the 12 months ended on
Germany since its inception. The 31 December, 2016. Provision has
net retention of the company for been made on the basis of the best
individual life is Tk. 2 lac per policy available information.
and for Group life Tk. 10 lac per
person of risk. Reinsurance
premium is recorded as an expense
evenly over the period of the
reinsurance contact and off-set
against the premium income of
respective year. Provision has been
made on the basis of best available
information. The claim recoveries
arising out of reinsurance contracts
 are off-set against the claims
expenses of respective year.

Board Act:
The Board of each Corporation shall consist of the Managing Director and six
other Directors to be appointed by the Government, at least three of whom
shall be from amongst persons who, in the opinion of the Government, have
had the experience and shown capacity in the field of insurance.
The Government shall appoint one of the Directors, other than the Managing
Director, to be
the Chairman of the Board.

Pragati Life Insurance Ltd. Delta life Insurance Ltd.

Board of director members at Board of director members at Delta
pragati Life Insurance is 13 people Life Insurance is
& has 3 independent director. 11people.Independent directors are
3 people & Audit committee has 3
people.

Actuarial valuation

The Jibon Bima Corporation shall, at least once in a year cause an

investigation to be made by the appointed actuary into the financial
condition of its business, including valuation of its liabilities in respect there
to, in accordance with the basis specified and shall cause an abstract of the
actuarial report to be made in such form and manner as specified in the
regulations made by the Authority and submit the report of the appointed
actuary to the Authority and also to the Government.
 Pragati Life Insurance Ltd.
Pragati Life Insurance has created
actuarial valuation under insurance
act and made by Mr. Rafiujjaman
Chowdhury
Delta life Insurance Ltd.
Has not indicated anything about
Actuarial valuation on their annual
report.

Profit Act
If as a result of any investigation undertaken by the Jiban Bima Corporation
under section 20 any surplus emerges, ninety five per cent of such surplus or
such higher percentage thereof as the Government may approve shall be
allocated to or reserved for the life insurance policy-holders of the
Corporation and the remainder shall be paid to the Government.

Pragati Insurance Ltd. Delta life Insurance Ltd.

The gross premium income during The gross premium income during
2015 2015 was 5582.4 million against tk
stood at Tk. 1,989.78 million 5444.2 million in 2014.
against Tk. 1,655.52 million
in 2014 registering a growth of
20.19%.

Claim Cost Act:

Claim costs consist of the policy benefit amount and claim settlement cost,
where applicable. Death and rider claims are accounted for on receipt of
intimation. Annuity & maturity benefit are accounted when due.

Pragati Insurance Ltd. Delta life Insurance Ltd.

 Payment to policy holder in the
form of Maturity, Survival Benefit,
Death, and Accidental Claims in the
year 2015 was
Tk. 1170.48 million against Tk. 944
million in 2014 being an increase of
24%. Since the inception of the
Company, the issued life insurance
policies have been increasing day
to day. At the same time, Payment
to Policyholder regarding Maturity,
Survival Benefit, Death, and
Accidental Claims is
being met together with. As a
result, the claim scenario is
successively increased.
Fixed Assets:
Without prejudice to the generality of the foregoing provisions, every
Corporation shall, in particular have power) to acquire, hold and dispose of
any property for the purpose of its business
Pragati Insurance Ltd.
Fixed assets are reported at cost
less accumulated depreciation and
impairment, if any. Cost includes
the purchase price and any cost
directly attributable to bring the
asset to its working condition for its
intended use. Fixed assets of small
value and assets for which useful
lives cannot be estimated properly
are fully charged to the revenue
account in the year of their
purchases. Subsequent
expenditures incurred on existing
fixed assets are expensed out
Claim cost consists of the policy
benefit amount & claim settlement
costs, where applicable. Death &
rider claims are accounted for on
receipt of intimation. Intimation
upto the end of the period are
considered for accounting of such
claims.
Delta life Insurance Ltd.
Fixed asset are reported at cost less
accumulated depreciation &
impairment, if any. Cost includes
the purchase price & any cost
directly attributable to bring the
asset to its working condition for its
intended use. Fixed asset of small
value and assets for which useful
lives can not be estimated properly
are fully charged to the revenue in
the year of their purchases.
Subsequent expenditures incurred
on existing fixed asset are
expensed out except where such
 except where such expenditure expenditure increases the future
increases the future economic economic benefits from the existing
benefits from the existing assets. assets.
Any addition to the original fixed
asset is depreciated over the useful
life of the asset.

Here are some differences between two companies which are not complying
with the insurance act:-

No. Particulars Pragati Life Delta Life Remarks

Insurance Insurance
Compl Not Comply Not
y Comply Compl
y
1 The post does not None Delta- No
remain vacant for Vacancy
more than 90 Occurred
days.
2 In special cases Not
the above applicable
qualifications may for both
be relaxed company
subject to prior
approval of the
Commission.
3 A discussion on
Cost of Goods
sold, Gross Profit
Margin and Net
Profit
Margin
4 Discussion on
continuity of any
Extra-Ordinary
gain or loss.
5 Utilization of
proceeds from
public issues,
rights issues
and/or through
 any others
instruments
6 An explanation if None
the financial
results
deteriorate after
the company
goes for Initial
Public Offering
(IPO), Repeat
Public Offering
(RPO),
Rights Offer,
Direct Listing, etc.
7 If significant None
variance occurs
between
Quarterly
Financial
performance
and Annual
Financial
Statements the
management
shall explain
about the
variance on their
Annual Report.
8 Significant
deviations from
the last years
operating results
of the issuer
company shall be
highlighted and
the reasons
thereof should be
explained.
9 If the issuer Delta-
company has not Dividend
 declared dividend Declared
(cash or stock) for
the
year, the reasons
thereof shall be
given.
10 When the term of
service of the
Committee
members expires
or there is
any circumstance
causing any
Committee
member to be
unable to hold
office until
expiration of the
term of service,
thus making the
number
of the Committee
members to be
lower than the
prescribed
number of 3
(three) persons.
11 When money is Delta- No
raised through IPO Issue
Initial Public was made
Offering in 2015
(IPO)/Repeat
Public Offering
(RPO)/ Rights
Issue the
company shall
disclose to
the Audit
Committee about
the
 uses/applications
of funds by major
category (capital
expenditure, sales
and marketing
expenses,
working
capital, etc), on a
quarterly basis,
as a part of their
quarterly
declaration
of financial
results.
12 Report on
conflicts of
interests;
13 Suspected or
presumed fraud
or irregularity or
material defect in
the
internal control
system;
14 Suspected
infringement of
laws, including
securities related
laws, rules
and regulations
15 Any other matter
which shall be
disclosed to the
Board of Directors
immediately.
16 If the Audit
Committee has
reported
to the Board of
Directors about
 anything which
has material
impact
on the financial
condition and
results of
operation and has
discussed
with the Board of
Directors and the
management that
any rectification
is necessary.

Here Delta Life Insurance Company Comply with 5 acts & Pragati Life Insurance
Comply with 8 acts which shows a positive indication for Pragati Life Insurance Ltd.

Graphical Presentation of Compliance with Act:-

8
7
6
5
4
3
2
1
0

Pragati Life Insurance Ltd.

Delta Life Insurance Ltd.