Corruption in Rupali Life Insurance (part-4): High-risk bets, stock losses, shrinking life fund leave policyholders in jeopardy
Special Correspondent
The second layer of the Rupali Life Insurance scandal involves the reckless endangerment of policyholders' accumulated savings through high-risk investments.
International Accounting Standard (IAS)-9 explicitly dictates that mandatory financial provisions must be maintained by an institution if any of its investments face a risk or uncertainty of recovery.
Completely overlooking this safeguard, Rupali Life's management parked Tk 6.16 crore across four non-banking financial institutions (NBFIs) plagued by severe financial crises and bankruptcy risks, alongside another Tk 8.51 crore in four critically weak commercial banks.
The consequences of these high-risk bets have already proven catastrophic.
Bangladesh Bank has taken the final decision to liquidate International Leasing and People’s Leasing, two institutions where Tk 2.60 crore of Rupali Life's funds remain trapped.
Following their liquidation, the insurance company is projected to recover a maximum of only Tk 20 lakh, meaning the remaining Tk 2.40 crore of policyholders' money has completely sunk.
Moreover , the company's internal financial controls show severe negligence.
A total of Tk 27.93 lakh remains outstanding and unadjusted with fieldworkers and officials. Despite this money being disbursed long ago as salary advances or for purchasing motorcycles and mobile phones, no effective recovery measures have been taken.
Financial statement fraud was also heavily utilized to understate renewal premium collection costs. From 2019 to 2024, Rupali Life's reported renewal expense ratio averaged 7.04 percent (ranging from 6.08 percent to 10.22 percent). In reality, the actual cost incurred for renewal premiums averaged 14.90 percent, peaking at times up to 19 percent.
By underreporting this expenditure rate by an average of 7.85 percent, the company severely misled stakeholders regarding its operational efficiency.
Simultaneously, the company suffered a net loss of Tk 4.36 cr in the stock market over eight consecutive years from 2017 to 2024. To mask this massive hit, management cleverly offset the losses against dividends received from mutual funds and other sectors, effectively wiping the equity losses from the public financial reports.
Ordinary policyholders are now paying the ultimate price for this continuous plundering and falsification of accounts.
Since 2022, Rupali Life’s total life fund has been continuously shrinking despite its rising financial liabilities toward clients.
As a direct consequence of this fund collapse, Rupali Life slashed its policy bonus rate from Tk 55 down to just Tk 45 per thousand taka of assurance. Sector insiders fear that if proper regulatory oversight and strict legal punishments are not immediately enforced, the hard-earned savings of ordinary citizens will soon vanish entirely.
Repeated attempts were made to contact Golam Kibria, the Managing Director of Rupali Life Insurance, to obtain his comments on these findings.
However, he did not respond to phone calls, text messages, or other communication channels, leaving the company without an official explanation regarding the severe allegations.
