The government will offer five new licences for life insurance business and to prohibit bank loans in establishing such business entity.
The finance ministry has finalised a guideline that said the minimum paid-up capital for life insurance companies would be Tk 30 crore.
Of the paid-up capital, sponsors-directors will provide 60 per cent and the companies will collect 40 per cent of the capital issuing initial public offerings within three years of getting licences, the proposed guideline said.
The guideline said that directors of the existing insurance companies would not be allowed to own or hold directorship in new companies.
It also set a number of criteria for eligibility for directorship including tax clearance from the National Board of Revenue and criminal clearance from the law enforcement agencies.
A person who is a loan defaulter for five years or has legal proceeding against him on loan defaulting issue will not be eligible for directorship, the guideline said.
No director can hold more than 10 per cent of the paid-up capital individually, it said.
The application form for directorship will cost Tk 5 lakh and a director has to invest minimum Tk 20 lakh, it said.
The Insurance Development and Regulatory Authority will also examine the integrity and past professional record of applicants for directorship, the guideline said.
Any legal record, except minor traffic violation, will also come into consideration.
Currently, there are 17 life insurance companies operating in the country.