The Insurance Development and Regulatory Authority (IDRA) urgently has to be reformed before the Insurance Act of 2010 is amended, according to insurance industry experts.They contend that many of the proposed modifications’ articles and subclauses call for a capable and effective regulatory body to properly implement them.
At a debate session on Saturday, November 22, at the Sagar–Runi Auditorium of the Dhaka Reporters’ Unity (DRU) in Segunbagicha, Dhaka, the statements were made. The specialized insurance platform, Insurance News BD, arranged the event, which aimed to increase the insurance industry’s development, efficiency, and transparency.

Former IDRA Life Member Sultan-ul-Abedin Molla presented the keynote paper, highlighting that IDRA has failed to take significant steps toward insurance sector reform since July, following public outcry. He noted that IDRA had not effectively recovered misappropriated funds, settled policyholder claims, or taken legal action against those involved in financial irregularities in the life insurance sector. Similarly, in the non-life insurance sector, IDRA has failed to curb illegal commissions and develop skilled human resources.

Molla pointed out that the proposed amendments affect 160 sections of the Insurance Act, 2010. While 99 sections remain unchanged, their sub-clauses are proposed for revision. Changes have been proposed for 61 sections, and 64 new sections and sub-clauses have been suggested. He stressed that implementing these amendments will require a skilled and capable regulatory authority, which IDRA currently lacks due to a shortage of trained permanent staff.

He criticized IDRA for relying heavily on government officials on deputation, whose tenure is uncertain and who often lack insurance sector experience. Molla emphasized that the authority must have a permanent, trained workforce similar to that of Bangladesh Bank or the Securities and Exchange Commission to ensure effective regulation.

While the proposed amendments claim to protect policyholders, Molla warned that excessive powers given to IDRA could be misused, potentially harming the insurance sector and undermining public trust. He called for reforms that ensure the insurance sector’s development alongside regulation, making insurance accessible and beneficial for the wider public.

Among other proposals in the draft amendments, approval from IDRA would be required for the appointment of company executives, significant shareholder transactions, and changes to company boards. Some existing provisions, such as those concerning policyholder claim settlement timelines, remain unchanged.

The discussion concluded that the amendment of the Insurance Act, 2010 should be preceded by comprehensive reform of IDRA to create a competent, transparent, and development-oriented regulatory authority capable of both supervising and promoting Bangladesh’s insurance sector.