The Insurance Development and Regulatory Authority’s (IDRA) decision to launch a special audit of sixteen general insurance companies is a long-overdue intervention in a sector plagued by mismanagement, regulatory laxity, and broken public trust.
With nearly half of all life and general insurance claims remaining unsettled beyond the legally mandated 90-day period, and over 5.4 million policies having lapsed since 2010, the need for decisive regulatory action has never been more urgent.
This audit targets companies flagged for governance failures, delayed claim settlements, and suspicious asset declarations. These are not isolated cases but symptomatic of systemic malaise.
When policyholders are forced to wait years for their entitled payouts—or worse, receive nothing—the credibility of the entire insurance framework collapses.
The fact that over a million policyholders are still awaiting payment is not just a statistic—it is a national failure of fiduciary responsibility.
IDRA’s move to examine issues such as premium collection, policy lapses, and compliance with financial regulations reflects a promising shift towards proactive oversight.
However, audits alone will not resolve the deep-seated issues that afflict this industry. Structural reform is essential.
The draft Insurance Resolution Ordinance 2025, modelled on the Bank Resolution framework, is a significant step forward.
By granting IDRA legal authority to restructure, merge, or even dissolve failing insurers—and in extreme cases, confiscate personal assets of delinquent directors—it sends a strong signal that accountability can no longer be deferred.
The sector must also welcome the accompanying review of CEO appointment procedures, especially in a landscape where 19 companies currently operate without a chief executive.
Still, regulation is only as effective as its enforcement. IDRA must be equipped not just with legal tools, but with the political backing and institutional independence necessary to apply them without fear or favour.
Dr M Aslam Alam’s candid acknowledgement of the crisis and his commitment to reform are encouraging.
But restoring trust will require more than rhetoric—it demands visible, sustained action that protects the interests of policyholders, reins in errant firms, and enforces transparency at every level.
For too long, Bangladesh’s insurance sector has survived on fragile ground. It is now time to build a foundation of credibility and resilience.
IDRA must seize this opportunity not merely to audit the past, but to ensure a future where insurance means assurance—for everyone.
