Claim settlements of troubled insurers from next week: IDRA

The Insurance Development and Regulatory Authority (IDRA) will begin settling long-overdue insurance claims from next week by liquidating assets and selling properties belonging to several troubled insurance companies, IDRA Chairman Mir Nadia Nivin said on Friday.

The regulator will process claims for seven to eight financially distressed insurers in the initial phase, she said at a workshop organised by the Insurance Reporters Forum (IRF) at the Bangladesh Academy for Rural Development (BARD) in Cumilla.

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“Funds generated from liquidating land, treasury bonds, and fixed deposits belonging to these companies are being deposited into separate bank accounts under IDRA’s supervision to pay policyholders on a first-come, first-served basis,” she said.

Nivin added that some assets had already been sold, while others were in the process of being liquidated.

Citing the situation of one troubled company facing unsettled claims worth around Tk 3,000 crore, she said proceeds from selling its land in Feni, along with liquidated bonds, would fund an initial payout of a few hundred crore taka.

If all its assets and bonds are fully liquidated, the regulator estimates that it can raise around Tk 1,500 crore to address a major portion of policyholder dues before a final decision is made on its future operations.

Nivin hoped that once the aforementioned company began repaying claims, it would regain policyholders’ confidence, start earning premiums again and turn around.

Failure to settle claims had hurt the companies themselves, Nivin stressed, adding that the industry as a whole would benefit once insurers started clearing dues.

REGULATORY REFORMS AND CHALLENGES

Nivin pointed out that there was no reliable data on the insurance sector available to anyone, not even to IDRA itself, as many insurance companies withheld real data both in their financial statements and from the regulator.

She said that some insurers had been keeping undisclosed “double servers” to hide their real financial data. The regulator wrote to them to follow a strict six-week deadline to eliminate the practice or face severe legal action.

Against this backdrop, a fully operational risk-based supervision model will be launched by December, making IDRA the first regulatory body in Bangladesh to adopt such a mechanism to identify data gaps and institutional risks, she added.

On digitalisation, Nivin said a centralised digital ID system for every policy would be rolled out within four months to eliminate fake premium reporting and partial business disclosures.

She declared zero tolerance for corruption, saying that anyone who offers a bribe to or demands one from an IDRA official would face immediate prosecution rather than an administrative warning.

Nivin acknowledged that IDRA faces severe operational constraints, regulating 82 companies with a staff of just 150, alongside outdated provisions in the Insurance Act, 2010.

Regulatory enforcement would nonetheless be intensified to protect policyholders, she added.

National Life Insurance CEO Md Kazim Uddin said claim defaults by a handful of companies had cast a shadow over the entire industry.

“The most effective way to restore public trust in the insurance sector is to settle claims on time,” he said.

IRF President Golam Mowla focused on the crisis of confidence in the sector stemming from the failure of some insurers to settle claims.

IDRA should ensure that insurance companies comply with rules and regulations, he stressed.

MIXED TRENDS IN CLAIM SETTLEMENT

The latest IDRA data shows that about 12 lakh policyholders remain unpaid, with 32 insurance companies struggling to clear their dues and seven recording the lowest settlement rates. Unsettled claims had grown to Tk 4,403 crore by 2025.

According to data from the Financial Institutions Division under the Ministry of Finance, the total amount of life insurance claims in 2024 stood at Tk 13,056 crore, of which Tk 8,609.5 crore were settled, meaning 65.94 percent of the claims were settled.

In comparison, 66.54 percent of life insurance claims were settled in 2025, marking a slight improvement.

Meanwhile, the total amount of non-life insurance claims in 2024 stood at Tk 4,322 crore, of which Tk 1,333 crore were settled, meaning 30.84 percent of the claims were settled.

In comparison, 25 percent of non-life insurance claims were settled in 2025, marking a significant drop.