IDRA quintuples Insurance companies’ registration renewal fees, raising legality concerns

Staff Correspondent: Bangladesh’s insurance regulator, the Insurance Development and Regulatory Authority (IDRA), has dramatically increased registration renewal fees for insurance companies by up to five times, but the move has triggered questions about its legal validity because it was announced after companies had already applied and paid for the 2026 renewal under the old rates.

All insurance companies submitted their applications for 2026 registration renewal by November 30, 2025, and paid the fee based on gross premium income from the 2024 accounting year at the prevailing rate of Tk 1 per Tk 1,000 of gross premium.

Despite this, on February 4, 2026, IDRA published a gazette notification amending the Insurance Business Registration Fee Regulations, 2012, introducing the higher fees with immediate effect from 2026.

Under the revised schedule: Tk 2.50 per Tk 1,000 of gross premium for 2026–2028; Tk 4 per Tk 1,000 for 2029–2031; Tk 5 per Tk 1,000 from 2032 onward

The previous fee stood at Tk 1 per Tk 1,000. Earlier, in 2012, it had been set at Tk 3.50 before being reduced to Tk 1 in 2018.

Insurance experts and industry stakeholders argue that the timing of the amendment conflicts with the Insurance Act 2010. Section 11(2) of the Act requires companies to apply for renewal by November 30 of the previous year and pay the fee prescribed by regulations at that time.

The 2026 renewal process is considered complete, with the deadline for renewal having passed by the end of 2025. Critics say retroactively changing the fee for an already-processed year raises serious questions of legality and fairness.

One expert noted that “companies have already paid the 2026 renewal fee based on the existing rules. Announcing a higher rate after the application window closed appears to contradict the spirit and provisions of the Insurance Act.”

IDRA has defended the increase, stating that the additional revenue is needed to strengthen regulatory capacity.

The authority cited requirements such as: Providing free services through the Insurance Information and Management System (IIMS); Expanding staff; Funding pensions and gratuities; Constructing its own building and branch offices; Supporting professional development through institutions including the Bangladesh Chartered Insurance Institute (BCII), Bangladesh Institute of Insurance Management (BIIM), and the Actuarial Society of Bangladesh

However, IDRA’s own financial reports show a healthy position. In the 2020–21 fiscal year, the regulator recorded total income of Tk 25.52 crore, of which nearly Tk 11.87 crore came from registration and renewal fees. Total expenditure stood at Tk 11.02 crore, leaving a surplus of Tk 11.16 crore (after tax provisions).

As of June 30, 2021, IDRA’s total fund stood at Tk 106.60 crore.

The fee hike has also been connected to IDRA’s push for sending policy information via SMS to customers through a private firm, DOER Service Limited. The arrangement, which began following a 2018 IDRA board decision, has faced strong opposition from insurance companies since its inception.

Insurers argue that they already have the capability to communicate directly with policyholders and that involving a third party unnecessarily increases costs while raising data security risks. Many companies have resisted bearing the expense of the service.

The timing and scope of the multi-year fee schedule have also drawn criticism. Industry observers note that while governments periodically adjust registration fees, setting rates five years in advance through a gazette notification is highly unusual and lacks precedent in the sector.

The development comes amid broader reforms in Bangladesh’s insurance industry, which has long faced challenges related to governance, claim settlements, and public confidence. Whether the new fee structure will be challenged legally or adjusted remains to be seen.