B Mirror Report : The Insurance Development and Regulatory Authority (IDRA) has made a historic ruling to safeguard consumers’ interests and restore discipline in the nation’s general (non-life) insurance industry.

All individual agent licenses in the non-life insurance industry will be suspended on January 1, 2026. This will lead to the total elimination of the long-standing practice of commission payments in this industry. IDRA issued a circular announcing this decision.

IDRA stated that under Section 58(1) of the Insurance Act 2010, there is no legal provision to pay commissions to anyone other than a duly licensed agent or broker. Since no individual agent licenses will be valid from 1 January, insurance companies will not be able to pay commissions or remuneration to anyone.

This strict measure has been taken based on the recommendations and consent of the Bangladesh Insurance Association (BIA) and the majority of insurance companies. However, this restriction will not apply to bank assurance and Insurtech operators.

Under the new rules, the salaries or allowances of development officers can no longer be determined as a percentage based on premium collection. Except for contractual appointments, all officials must be paid according to a fixed pay scale, and payments must be made through bank transfer or account-payee cheque. IDRA believes that this decision will reduce unhealthy competition in the market, strengthen the financial foundation of insurance companies, and enable them to pay higher dividends to investors.

Following this decision, several insurance companies have welcomed the move. In a reaction, Peoples Insurance PLC stated that it has already instructed its head office and all branch offices to strictly comply with the directive.

Industry stakeholders believe that abolishing the commission system will reduce irregularities in insurance companies and increase government revenue collection. This reform initiative will play a very important role in ensuring transparency and accountability of insurance companies listed on the stock market.