Insurance law amendment stalled as no feedbacks yet from company owners
According to IDRA officials, despite repeated requests, the Bangladesh Insurance Association (BIA), the representative body of insurance owners, is deliberately delaying the process
Highlights:
- IDRA faces delays as insurance owners fail to provide feedback
- Draft amendment aims to strengthen oversight and protect policyholders
- IDRA plans to send proposal to Finance Ministry without BIA input
- BIA says consultations are ongoing; feedback will be submitted soon
- Amendments expand IDRA powers to restructure or liquidate insurers
- New rules seek financial stability and stronger consumer protection measures
The draft amendment of the Insurance Act 2010 is facing delays in finalisation as the Insurance Development and Regulatory Authority (IDRA) has not received any responses from insurance company owners, despite sending multiple letters requesting their feedback.
The delay is affecting efforts to protect customers' interests and maintain public confidence in the financial sector, the regulator said.
Keep updated, follow The Business Standard's Google news channel
According to IDRA officials, despite repeated requests, the Bangladesh Insurance Association (BIA), the representative body of insurance owners, is deliberately delaying the process.
BIA officials, however, maintain that they are working on the draft and will submit their feedback to IDRA soon.
Now, IDRA has decided to forward the draft amendment to the Financial Institutions Department (FID) of the Ministry of Finance without waiting for the association's feedback.
"We have requested their feedback for a long time. However, they have repeatedly taken time and have not yet provided it. This is causing delays in finalising the amendment," IDRA spokesperson Saifun Nahar Sumi told The Business Standard.
"A consultation meeting on this amendment is scheduled for 14 October [today] to get feedback from stakeholders," she added.
Earlier in June, the government introduced a new ordinance for the sector – the Insurer Resolution Ordinance 2025 – which was published on IDRA's website, inviting stakeholder feedback within 15 working days.
According to IDRA sources, the amendment is extremely important for the insurance sector, making it essential to gather opinions from all relevant parties.
However, the owners' association does not want the law to be passed hastily, fearing that the new amendment will bring the sector under stricter rules and regulations.
BIA Secretary Md Omar Faruk said, "Providing feedback involves many issues and consultations with multiple parties, which is why it is taking time. We have already requested an extension and hope to submit the feedback soon."
SM Nuruzzaman, CEO of Zenith Islami Life Insurance, stated that a committee had been formed, and the feedback has already been prepared. It is currently being reviewed by insurance experts, and once completed, it will be submitted to IDRA within a short time.
In a letter sent to IDRA, dated 11 August, the association's President Saeed Ahmed said feedback was being collected from chief executives, advisors, and insurance company owners, as well as the association's executive committee members regarding the amendments in the draft.
Efforts to gather and review well-considered opinions on different sections of the amended law are also ongoing, Saeed stated.
Expanded powers for regulator
As per the proposed amendments, the regulatory authority will have the power to transfer the shares, assets, and liabilities of insurance companies to third parties and, if necessary, liquidate the company.
IDRA will also have the authority to remove or replace the chairman, directors, CEO, key management personnel, or any other employee of the insurance company.
The draft states that the primary objective of the amendment is to maintain the stability of the entire financial system, including the payment, settlement, and liquidation processes of insurance companies.
It also aims to protect customers' interests, ensure the continuation of critical insurance operations, prevent unnecessary losses of government funds, preserve the value of insurance companies' assets, minimise creditors' losses, and maintain public confidence in the financial system.
The ordinance will also apply to Islamic insurance companies, although IDRA will need to formulate separate regulations for them.
The draft further states that companies' capital will be increased through current shareholders or new investors. One or more "bridge insurance companies" will be formed to facilitate the later sale of troubled companies or their shares to third parties.
It further outlines how the government could temporarily assume ownership of an insurance company if necessary.
The ordinance includes provisions for the establishment of a consumer protection fund and arrangements for compensation to shareholders and creditors. A council is proposed to manage crises in the insurance sector, which will address institutional, natural, and other types of emergencies.
It also allows for the liquidation of insurance companies under certain circumstances, through which the companies' liabilities can be settled.
