Spl audit launched into 16 risky insurance firms
Muhammad Ayub Ali :
The Insurance Development and Regulatory Authority (IDRA) has initiated a comprehensive special audit of sixteen general insurance companies listed on the Dhaka Stock Exchange, citing concerns over governance failures, delayed claim settlements, and questionable asset practices that have undermined public confidence in the sector.
These companies were flagged during recent evaluations for
operational irregularities that have raised serious questions about the integrity of their financial and customer service practices.
Announcing the initiative at a press briefing, IDRA Chairman Dr M Aslam Alam said the audit would examine several critical issues, including the reasons behind failure to settle policyholder claims within the legally mandated 90-day period, rising difficulties in premium collection, increasing policy lapses, and the true status of declared assets.
The audit will cover financial year 2023 accounts and assess premium deposits and refunds, policy cancellations, reinsurance arrangements, and compliance with regulatory requirements, including cost management and data reporting accuracy.
According to IDRA data, approximately 45 per cent of life insurance claims and 47 per cent of general insurance claims remain unsettled beyond the statutory deadline. Since 2010, over 5.4 million policies have lapsed nationwide, with around 1.1 million policyholders still awaiting payments.
The insurers currently under audit include: Islamic Insurance Bangladesh, Islamic Commercial Insurance, Express Insurance, Continental Insurance, Dhaka Insurance, Takaful Islamic Insurance, Desh General Insurance, Purabi General Insurance, Prabhati Insurance, Phoenix Insurance, Mercantile Islamic Insurance, Republic Insurance, Sikder Insurance, Sonar Bangla Insurance, Standard Insurance, and Nitol Insurance.
Bangladesh’s insurance sector consists of 82 companies – 46 general insurers and 36 life insurers – of which 58 are listed on the capital market. However, the industry continues to struggle with persistent mismanagement, allegations of fund misappropriation, and weak regulatory oversight, according to IDRA.
Dr Alam, who assumed office in August 2024, acknowledged that these long-standing issues have significantly eroded public trust and hindered sectoral development.
To address the sector’s structural weaknesses, the government has finalised the draft Insurance Resolution Ordinance 2025, modelled on the Bank Resolution framework. The draft has been released for public and stakeholder consultation.
The proposed legislation introduces a legal framework for restructuring, ownership transfers, mergers, or the dissolution of failing insurers. It also authorises IDRA to declare insurers bankrupt and, in extreme cases, to confiscate the personal assets of directors in order to compensate affected policyholders.
In parallel, IDRA is also revising regulations governing the appointment and removal of chief executive officers (CEOs) to strengthen leadership at the top.
Currently, 19 out of 82 licensed insurers are operating without a CEO-some for over three years-due to a reported shortage of qualified candidates. The new rules aim to introduce more rigorous, transparent, and merit-based hiring practices.
Dr Alam stressed that these reforms are critical to restoring confidence and ensuring long-term sustainability in the sector. “Unless transparency and discipline are enforced, we cannot regain public trust,” he said. “These new laws will lay the groundwork for a more credible and resilient insurance industry.”