Limitation of expenses of management in general insurance business
40C. (1) No insurer shall, in respect of any class of general insurance business transacted by him in Bangladesh, spend in any calendar year as expenses of management [, including commission or remuneration for procuring business], an amount in excess of the prescribed limits and in prescribing any such limits regard shall be had to the size and age of the insurer:
Provided that the Chief Controller of Insurance may, on an application made to him in this behalf, condone the contravention of this sub-section by an insurer who has, on reasonable grounds, spent as such expenses an amount in excess of such limits.
(2) Every insurer as aforesaid shall incorporate in the revenue account a certificate signed by the chairman, two directors and the principal officer of the insurer, and an auditor's certificate, certifying that all expenses of management wherever incurred, whether directly or indirectly, in respect of the business referred to in this section have been fully debited in the revenue account as expenses.
Explanation.- In this section,-
(a) “expenses of management” means all charges, wherever incurred whether directly or indirectly [including commission payments of all kinds] and, in the case of an insurer having his principal place of business outside Bangladesh, a proper share of head office expenses which shall not exceed such percentage of the total net premiums, that is to say, gross premiums written direct in Bangladesh plus reinsurances accepted minus reinsurances ceded during the year as may be prescribed; and
(b) “insurance business transacted in Bangladesh” includes insurance business, wherever effected, relating to any property situated in Bangladesh or to any vessel or aircraft registered in Bangladesh.