Insurance CEO rules to be overhauled

Muhammad Ayub Ali :

The Insurance Development and Regulatory Authority (IDRA) has proposed sweeping amendments to the rules governing the appointment and dismissal of chief executive officers (CEOs) in Bangladesh’s insurance industry.

The draft changes aim to strengthen corporate governance, improve regulatory oversight, and curb persistent malpractice in the sector.

At present, only the boards of individual insurance companies hold the authority to remove their CEOs. IDRA plays no formal role in such decisions.

However, under the proposed regulations, the authority is seeking powers to not only remove CEOs found guilty of misconduct or abuse of power but also disqualify them from holding executive positions across the entire insurance sector.

IDRA officials said the objective is to stop the recurrence of problematic or controversial figures moving from one insurer to another without facing accountability.

Bangladesh currently has 81 insurance companies, at least 25 of which have been operating under acting CEOs for over two years.

This prolonged interim leadership has reportedly hampered both decision-making and regulatory compliance.

To ensure fairness, IDRA will allow individuals facing allegations the opportunity to present their defence before any action is taken.

If deemed necessary, an independent inquiry committee will be constituted to investigate complaints before a final decision is made.

The proposed amendments also address a longstanding shortage of qualified CEO candidates. Existing regulations require applicants to have a minimum of two years’ experience as an Additional Managing Director (AMD) and at least 12 years of service in the insurance sector.

These strict criteria have left many companies unable to appoint permanent CEOs, forcing them to rely on temporary leadership.

Under the revised guidelines, candidates would qualify for the CEO role with one year’s experience as an AMD or three years as a Deputy Managing Director (DMD) within the insurance sector. Alternatively, candidates with one year of AMD experience or 15 years as a DMD in a private commercial bank would also be eligible.

This broadened eligibility is expected to expand the talent pool and facilitate the entry of seasoned banking professionals into the insurance sector-an important development at a time when leadership gaps are impeding reform and modernisation.

Commenting on the draft, IDRA spokesperson Saifun Nahar Sumi stated: “Many insurers are operating with interim leadership due to restrictive eligibility criteria.

These proposed reforms are designed to enhance regulatory oversight while addressing the ongoing leadership vacuum.”
The amendments are currently in draft form and will be subject to stakeholder consultation before final implementation.