Nature of Financial Reporting Disclosure: An Analysis of Insurance Company in Bangladesh

Abstract

In business and human life lots of risks and uncertainty exists. For deducing the risks of business, insurance gives the monetary compensation for the insured risk and for human life and it gives assurance to pay certain amount of money for certain conditions. In another sense, People have to live and play with hazards and to some extent insurance policy can free people from those frustrations. Even if this is true, people of Bangladesh still don’t prefer to insure themselves. Here, this study will try to find out the problems of insurance business in Bangladesh and will try to suggest some steps for overcoming these problems. The insurance industry faced a shock suddenly. One of the shock is an efficient financial reporting disclosure which is a nature in measuring the strength of any company. To reform & modernize the insurance sector in Bangladesh, the parliament of Bangladesh passed a new Insurance Act 2010 in March 2010. Since just after passing a new act to replace the old one, the previous Insurance Act 1938 became inactive due to pass Insurance Act 2010. At present, 75 companies are operating their business including foreign companies. Furthermore, this study has been tried to analyze very well to get the actual scenario of the financial reporting disclosure conditions of the life and nonlife insurance companies. This revealed that most companies have poor financial reporting disclosure conditions. With proper evidence, this study also tried to determine the present level of the financial reporting disclosure and how to remove this poor condition efficiently.