The Ministry of Commerce is now examining three proposed laws -- Independent Insurance Regulatory Authority Act-2005, Insurance Act 2005 and 'Takaful' Act 2005-- drafted recently by a high-level government committee.

The government is also mulling over launching a separate independent regulatory authority act in order to bring all the insurance companies, both government and private, under a single regulatory mechanism.

Under the initiative, the commerce ministry is also working for introducing a 'policyholders' protection fund, setting up brokerage house for insurance companies and setting mandatory minimum solvency margin option.

Sources said the ministry is seriously considering the policyholder protection fund as currently thousands of insurance policyholders cannot reap desired benefits from different insurance companies and their agents.

"Such a fund can be used for providing compensation for the policyholders who might have been cheated by insurance companies. An independent committee comprising government and private insurance sector representatives will identify the policyholders' claims as actual or false," a high official of commerce ministry said on Thursday.

The committee may also act as an ombudsman to examine any claim against any insurance company, he added.

The official said the ministry is planning to introduce brokerage house for insurance companies in a bid to replace the existing commission agents who have long been involved in uneven competition to grab business.

Besides, the ministry is working for a 'Takaful Act' for Islamic insurance in the country as the segment is emerging as a major player.

The ministry will soon hold an inter-ministerial meeting to discuss the proposed acts.

After finalising the draft acts, the ministry will send those to the cabinet for final approval.

Earlier, an eight-member committee, headed by the chief controller of insurance, prepared the drafts of the acts and submitted those to the commerce ministry.

Private sector is playing a significant role in insurance business for which a strong monitoring and regulatory authority was demanded by the insurance players, sources said.

The government is also planning to bring some amendments to the existing insurance policy, sources added.

At present there are 17 companies operating in the life insurance business in Bangladesh, while the number of non-life insurance companies stands at 43. Meanwhile, around 100 individuals and institutions have submitted their expression of interests to the government to start insurance business.