The Insurance Development and Regulatory Authority (IDRA) has made the settlement of long-pending insurance claims its top priority as part of a broader reform agenda aimed at restoring public confidence in Bangladesh’s insurance sector.

Speaking at a media briefing on Thursday, IDRA Chairman Mir Nadia Nivin said rebuilding trust in the industry begins with ensuring that policyholders receive their outstanding claims.

“Our first priority is to settle pending claims as quickly as possible. Once policyholders start receiving their dues, confidence in the sector will gradually return, helping stabilise the industry,” she said.

Over the past two weeks, IDRA has held separate meetings with the owners and chief executive officers of the seven most financially distressed insurance companies to review their financial conditions, assets and investments. The regulator has also ordered fresh valuations where asset values appeared questionable.

Under the recovery plan, proceeds from the sale of land, government treasury bonds, investments and other assets will be deposited into dedicated bank accounts supervised by auditors. Claims will then be settled on a first-in, first-out (FIFO) basis, with the oldest claims receiving priority.

According to the regulator, the insurance sector currently has around Tk 70 billion in unpaid claims, of which nearly Tk 45 billion is concentrated in just seven companies. The initial reform programme will therefore focus on these firms.

To raise funds for claim settlements, IDRA has identified four key sources: fixed deposits held with financially sound banks, government treasury bonds, marketable land and other investments. Deposits trapped in troubled banks will be addressed in consultation with Bangladesh Bank.

As part of wider reforms, the regulator also plans to crack down on excessive and concealed commission payments, which are often disguised as salaries or contractual payments. Enforcement measures are expected within the next month.

IDRA is also shifting from a compliance-based regulatory framework to risk-based supervision, allowing more frequent monitoring of insurers’ financial conditions and earlier intervention when risks emerge.

To strengthen consumer protection, the authority plans to introduce a mandatory unique policyholder identification system. Every valid insurance policy will generate a unique verification ID that will be sent directly to the policyholder’s registered mobile phone.

The regulator also intends to tighten the verification of academic and professional credentials of senior insurance executives through universities, international databases, Bangladesh Bank and credit information sources before approving appointments.

On legal reforms, the chairman said the existing law does not allow fines imposed on insurance companies to be recovered directly from directors, although policy discussions on the issue are underway. She added that legal action would be pursued wherever evidence of financial fraud or fund misappropriation is found, after prioritising the settlement of policyholders’ claims.

The chairman acknowledged that staffing shortages remain a major challenge for IDRA due to government recruitment restrictions. The regulator is exploring alternative measures to strengthen inspections and field-level supervision.

She said restoring discipline in the insurance sector would require coordinated efforts from regulators, the government, insurance companies and other stakeholders, with rebuilding policyholder confidence remaining the immediate objective.