IDRA to sell insurers’ assets to pay unpaid claims

The newly appointed chairman of the Insurance Development and Regulatory Authority (IDRA), Mir Nadia Nivin made the remarks on Thursday while responding to questions from journalists during a media briefing

The newly appointed chairman of the Insurance Development and Regulatory Authority (IDRA), Mir Nadia Nivin, said settling long-pending policyholders’ claims will be the regulator’s top priority, even if it requires selling the assets of financially distressed insurance companies.

She also outlined a series of reform initiatives, including cracking down on corruption, stopping illegal commission trading, launching unique IDs for policyholders, and shifting to risk-based monitoring.

The chairman made the remarks on Thursday while responding to questions from journalists during a media briefing.

She said the biggest challenge facing Bangladesh’s insurance sector is restoring public confidence.

The first step toward rebuilding that trust is to begin settling outstanding claims as quickly as possible. Once claims start being paid, policyholders’ confidence will gradually return, making it easier to stabilise the sector.

The IDRA chief said the regulator had held separate meetings over the past two weeks with the owners and chief executive officers (CEOs) of the seven most financially distressed insurance companies.

Their assets, investments and overall financial positions were reviewed, and companies with questionable asset valuations have been instructed to conduct fresh assessments.

She said land, treasury bonds, investments and other assets owned by these companies would be sold in phases, with the proceeds deposited into separate bank accounts dedicated to each insurer.

The accounts will be monitored by independent auditors, while claims will be settled on a first-in, first-out (FIFO) basis, ensuring that policyholders who filed claims earlier receive payment first.

According to the chairman, the insurance sector currently has around Tk7,000 crore in outstanding claims across life and non-life insurers, with nearly Tk4,000 crore concentrated in just seven companies. IDRA has therefore prioritised these insurers in its initial recovery efforts.

She said four categories of assets are being considered for liquidation: fixed deposits (FDRs) held with financially sound banks, government treasury bonds, saleable land and other investments.

Deposits stuck in financially troubled banks will be addressed through discussions with Bangladesh Bank.

Crackdown on commission trading

The chairman said the practice of paying excessive commissions remains widespread in the insurance sector, with commissions often disguised as salaries or paid through various contractual arrangements.

She said IDRA is working to gather evidence of such hidden commissions and bring them under regulatory control, adding that visible enforcement measures are expected within the next month.

Risk-based supervision

The IDRA chief also announced plans to replace the existing compliance-based supervisory framework with a Risk-Based Supervision (RBS) system.

She said the financial reports currently submitted to the regulator are often outdated, making it difficult to assess insurers’ actual financial condition.

Under the new framework, companies will be monitored using more frequent and up-to-date financial information, enabling IDRA to identify risks earlier and take timely corrective action.

Unique policyholder ID

To strengthen consumer protection, IDRA is also moving ahead with the introduction of a Unique Policyholder ID.

The chairman said every valid insurance policy would generate a unique identification number that would be sent directly to the policyholder’s registered mobile phone.

Customers who do not receive the ID should refrain from paying premiums against that policy. IDRA also plans to launch a nationwide public awareness campaign on the initiative.

Tighter verification of qualifications

Responding to allegations that some senior insurance company officials had used forged academic certificates, the chairman said the matter is already under investigation.

She said verification of educational credentials would be significantly strengthened. If necessary, IDRA would use international databases, verify information directly with universities, coordinate with Bangladesh Bank and conduct background checks through the Credit Information Bureau (CIB).

No legal provision to seize directors’ assets

Asked whether penalties imposed on financially weak insurance companies could be recovered from directors’ personal assets, the chairman said the existing law contains no provision allowing such action.

Although the issue is under policy discussion, she said it cannot be implemented immediately.
Addressing allegations of fund misappropriation by insurance company officials, the chairman acknowledged that the sector faces multiple structural problems.

She said it would not be possible to address all issues simultaneously.

For now, IDRA’s priority is to settle policyholders’ claims and restore stability to the sector. Once that objective is achieved, proven cases of embezzlement or other illegal activities will be pursued through legal action, and efforts will be made to recover the misappropriated funds.

The chairman also said IDRA is facing a manpower shortage. Although the previous leadership had initiated efforts to increase staffing, government restrictions on recruitment remain in place.

As a result, the regulator is exploring alternative ways to strengthen field inspections and regulatory supervision.

Nivin stressed that restoring the health of the insurance sector would require coordinated efforts by the regulator, the government, other supervisory agencies, insurance companies and the media.

“Our immediate goal is to restore policyholders’ confidence. Thereafter, we will gradually bring the entire insurance sector back under proper discipline,” she said.