Golden Life Insurance Struggles Amidst Financial Crisis
Private insurer Golden Life Insurance Limited is grappling with a severe financial crisis, characterized by a cash crunch, unpaid claims, and operational failures. Established in 1999, the company finds itself in turmoil, its headquarters closed, numerous key officials absent, and approximately 18,000 policyholders awaiting their due payments.
After a political transition in the previous August, the insurer’s troubles intensified, with its head office in the Ambon Complex of Dhaka’s Mohakhali area remaining shut for over a month. This closure followed a confrontation between frustrated policyholders and company staff after Golden Life failed to settle claims totaling Tk 34.95 crore.
Amzad Hossain Khan Chowdhury, the Chief Executive Officer of Golden Life Insurance, acknowledged the gravity of the situation. “The head office has been shut for the last 20 consecutive days. We are making every effort to resolve the current problem,” he stated. While Chowdhury claimed that branch offices were operating “as usual,” the company’s inability to pay nearly 200 employees their salaries or to clear overdue rent for its headquarters highlights the financial distress.
Years of Mismanagement
The current crisis stems from years of operational mismanagement and governance failures. Chowdhury pointed to irregularities between 2011 and 2014, including unreported policies and unsubmitted money receipts by field-level employees, which led to a backlog of liabilities. “When these clients claimed their funds, the money went pending,” the CEO explained. He further added that after the political changeover in August, operational funding was abruptly halted, resulting in the ceasing of claim settlements from September and the suspension of staff salaries.
A recent visit to the company’s head office revealed locked doors on the 3rd and 5th floors of the Ambon Complex. A notice at the building’s entrance read, “The office is currently closed. A strike is underway due to the board’s failure to provide promised funds on time. We kindly ask customers for their patience.”
A senior official from the building’s management informed The Daily Star that Golden Life had not paid rent, electricity, or water bills for two months. However, the insurer has reportedly committed to settling the dues after the upcoming Eid-ul-Fitr and vacating the premises.
The crisis at the headquarters has extended to Golden Life’s regional offices as well. A visit to its Chattogram divisional office on March 16 found only one official present, with the office head’s room locked and no other staff in sight.
Regulatory Intervention
Amidst the crisis, the Insurance Development and Regulatory Authority (IDRA) has intervened. The company’s managing director, head of accounts, and company secretary were summoned by IDRA last week for updates. The deadline set by the insurance regulator for resolving the issue was yesterday, but the company failed to meet it and requested additional time. The regulator granted the request, scheduling the next meeting for March 20.
Md Apel Mahmud, IDRA’s member for life insurance, stated, “A company cannot operate like this. They also do not have the authority to shut down a company’s head office in this manner. There are certain systems and rules in place.”
Meanwhile, AKM Azizur Rahman, chairman of Golden Life Insurance, assured IDRA in a letter yesterday that all outstanding urgent claims would be settled within the next 30 days.
Golden Life’s troubles are not new. A special audit conducted by IDRA in 2022 uncovered significant irregularities, resulting in a Tk 22 lakh fine, which remains unpaid. Additionally, the company has failed to provide approval documents for its 14 insurance products, raising further concerns regarding its compliance and governance.
Golden Life’s total assets stand at Tk 55.85 crore, with 140,000 policyholders. Bangladesh has a total of 82 insurance companies, with 36 in the life insurance sector and 46 in the non-life sector.
[Md Nazrul Islam from Chattogram contributed to this report.]
