The Insurance Development and Regulatory Authority (IDRA) will begin paying outstanding insurance claims to customers of several troubled insurance companies from next week, IDRA Chairman Mir Nadia Nivin said on Friday.

The payments will initially cover seven to eight companies. Funds recovered by selling land and encashing treasury bonds, fixed deposits and other assets of the companies have been kept in separate bank accounts under IDRA supervision.

The recovered funds will be used to settle customers’ outstanding claims. The authority will follow a “first applied, first paid” policy, meaning claims submitted earlier will receive priority.

Nivin said IDRA officials and auditors will monitor the relevant bank accounts, while the companies themselves will not be allowed to use the funds directly. Auditors have also verified the lists of claims submitted by the companies.

Far East Islami Life Insurance is among the companies being considered for the initial settlement process. The insurer has outstanding claims of around Tk 3,000 crore, according to the IDRA chairman.

The company’s first-year premium collection has been suspended, although it can continue collecting renewal premiums. Proceeds from the sale of land in Feni and the encashment of some bonds will be used to make initial payments to policyholders.

Several other properties have also been put up for sale through tenders. Nivin said that if all of Far East’s assets and bonds are liquidated, around Tk 1,500 crore could be raised, allowing a significant portion of its outstanding claims to be settled.

The IDRA chairman said the initiative is aimed at protecting policyholders and restoring public confidence in the insurance sector. She also stressed that timely settlement of claims is essential to rebuilding trust in the industry.