The Insurance Development and Regulatory Authority (IDRA) has suspended Progressive Life Insurance Company’s new policy sales until it deposits Tk 15 crore to ensure payment of outstanding insurance claims.

The restriction will take effect on November 4. Until the required amount is deposited, the company will not be allowed to collect first-year premiums from new policies. However, it can continue collecting renewal premiums from existing policyholders and settling insurance claims.

According to an IDRA directive issued on November 2, the company must deposit either Tk 10 crore raised through encashment of government treasury bonds or Tk 15 crore generated from the sale of fixed assets into a designated bank account.

The regulator took the decision under Section 50(1)(e) of the Insurance Act, 2010, citing concerns that expanding new business while outstanding claims remain unpaid could increase commission and other acquisition expenses, further affecting the company’s ability to settle existing claims.

Tk 6.27cr Loss from Bond and Share Sales

In letters sent to IDRA on October 28 and November 1, Progressive Life reported a combined loss of Tk 6.27 crore from selling investments to arrange funds for insurance claims.

The company incurred a loss of Tk 1.63 crore by prematurely encashing government treasury bonds worth Tk 18.50 crore. It also suffered a loss of Tk 4.64 crore from selling a share portfolio worth Tk 8.40 crore at a loss.

Chief Executive Officer Mohammad Saidul Amin said repeated premature encashment of treasury bonds could increase capital losses and weaken the company’s financial position, potentially putting future claim payments at risk.

He also said the company would need several weeks to complete the necessary procedures to encash another Tk 10 crore in treasury bonds.

Between August 30 and October 19, the company settled claims worth Tk 13.68 crore for 3,490 policyholders using proceeds from treasury bonds. Another 215 customers received Tk 1.10 crore from other funds. Altogether, 3,705 policyholders received approximately Tk 14.78 crore.

Aftabnagar Land Sale to Generate Tk 15cr

To avoid further losses from premature bond encashment, Progressive Life has initiated the sale of its 8.54-katha land in Aftabnagar, Dhaka. IDRA has already given in-principle approval for the sale.

The company expects to generate around Tk 15 crore from the property, with the entire proceeds earmarked for settling insurance claims.

However, the company has sought an additional month to complete the sale, citing the need to arrange the buyer’s funds, obtain approval from its three-member sale committee and collect necessary documents, including the deed of title and clearance from Eastern Housing.

Progressive Life CEO Saidul Amin said the company was working to expedite the land sale and fund arrangements in compliance with IDRA’s decision.

He added that after depositing Tk 15 crore into the designated bank account, the company would approach the regulator to seek permission to resume new business operations.