Listed insurer Asia Insurance PLC issued 10,760 marine insurance policies or cover notes between 2018 and 2024 without receiving the required premium payments, according to its audited financial statements and auditors’ observations.
The policies carried a total premium of Tk 19.59 crore, but only Tk 2.77 crore was recorded in the company’s accounts. As a result, Tk 16.82 crore was not reflected in the company’s principal accounting records.
The irregularity was identified during the 2025 audit, following which the company restated its financial statements for previous years. Audit firm Saiful Shamsul Alam & Co described the practice as a deviation from applicable laws and regulations.
According to Note 1.6(b) of the audit report, issuing insurance policies without receiving premiums violates Insurance Development and Regulatory Authority (IDRA) rules. Section 18(1) of the Insurance Act 2010 prohibits an insurer from assuming risk until payment of the premium has been secured through cash, cheque or bank guarantee.
Under Section 18(4), issuing a cover note without receiving the premium can result in a fine of up to Tk 5 lakh for the company and the individuals concerned. Stating that payment has been received when it has not can also carry a penalty of up to three years’ imprisonment or a fine of Tk 5 lakh under Section 130.
The auditors also raised concerns over weaknesses in the company’s IT controls, particularly inadequate security measures for data entry and changes made to the system.
Meanwhile, Asia Insurance’s investment in the stock market had a purchase value of Tk 53.12 crore, while its market value fell to Tk 42.01 crore as of December 31, 2025, resulting in a decline of Tk 11.11 crore.
The company’s net operating cash flow per share also declined by nearly 34% to Tk 1.89 in 2025 from Tk 2.85 in 2024. Despite the decline, the board recommended a 10% cash dividend for 2025.
The balance sheet showed Tk 10.31 crore as deposit premium, against which no policies had been issued. It also reported Tk 17.29 crore as miscellaneous receivables. The auditors expressed doubts over the recoverability of a significant portion of these receivables.
Asia Insurance CFO Md Rafiqul Islam said the amounts collected at different times had been recorded as deposit premiums and remained as liabilities in the company’s accounts. In some cases, cover notes could not be converted into policies because bills of lading or shipment advice had not been received.
He said the company previously had nine months to convert cover notes into policies, but a new circular issued in 2025 extended the period to 24 months. The company subsequently reviewed and reconciled the old cover notes and converted those within the permissible period into policies.
Rafiqul Islam said the money had not been lost and remained accounted for in the company’s records. Regarding the Tk 17 crore in miscellaneous receivables, he said around 60% had already been recovered.
He added that the employee responsible for the long delay in converting the policies had since left the company. Regarding the negative cash-flow balance, he said around Tk 4 crore was received during the audit process but after December 31.
IDRA spokesperson Saifunnahar Sumi said Asia Insurance was fined Tk 50,000 in 2022 and that no further action had been taken since then. She said the regulator was reviewing the irregularities identified in the audit, including the issuance of policies without receiving premiums, and would take necessary action if violations were established.
