Will insurance companies pay extra fees by violating the law to pay off DOAR?

Staff Reporter: The Insurance Development and Regulatory Authority (IDRA) has instructed insurance companies to pay the remaining fees for the 2026 registration renewal according to the amended ‘Insurance Business Registration Fee Rules-2012’. However, the insurance companies have already paid the registration fees for 2026.

On the other hand, there is no opportunity to increase the paid fees anew or collect them under the Insurance Act-2010. Moreover, the Insurance Development and Regulatory Authority Act does not grant the regulatory body the authority to collect extra fees based on retrospective approval.

In such a situation, the question arises as to how much the insurance companies will accept this arbitrary decision by IDRA officials in violation of the insurance law.

According to sources, after the mass uprising in July 2024, insurance companies refused to pay the bills of the controversial firm ‘DOAR Service Limited’. And in the name of providing this SMS service for free, IDRA decided to increase the registration renewal fees of insurance companies up to 5 times.

Moreover, IDRA withheld the registration of insurance companies to collect the increased fees according to the amended registration renewal fee rules.

However, according to the Insurance Act 2010, operating an insurance company without registration is illegal. In this case, applications for the current year’s registration renewal must be submitted by November 30 of the previous year. The registration fee must be paid based on the total premium collected in the last accounting closing year.

On February 4, the government published a gazette further amending the ‘Insurance Business Registration Fee Rules-2012’. Then, on February 19, IDRA instructed the insurance companies to pay this increased registration renewal fee. At the same time, there are allegations that the organization is calling the companies and threatening not to renew the registration if the extra fee is not paid.

According to the amended rules - for 2026, 2027 and 2028, the insurance company’s registration renewal fee will be 2 taka 50 paisa per thousand taka gross premium. For 2029, 2030 and 2031, 4 taka per thousand gross premium and for 2032 and subsequent periods, it will be 5 taka per thousand.

Previously, the insurance company’s registration renewal fee was 1 taka per thousand taka gross premium.

Meanwhile, those involved in the insurance sector consider the increase in registration renewal fees from 2026 to be unreasonable and conflicting with the law. In this case, the chief executives of the companies have demanded renewal of registration by accepting the fees paid at the previous rate. In their opinion, if the fee needs to be increased, it can be implemented from 2027.

On this matter, the Secretary General of Bangladesh Insurance Forum (BIF) and Chief Executive Officer of Sena Insurance, Brigadier General Md. Shafiq Shameem PSC (Retd.) said, the issue of collecting increased fees for the 2026 registration renewal should be reconsidered and the companies’ registration certificates should be renewed based on the fees submitted at the previous rate.

He said, the new rate of registration renewal fees for insurance companies can be implemented from 2027. In this case, the complication that has arisen in the companies regarding the payment of registration fees will no longer exist. At the same time, the companies will get the opportunity to take necessary measures regarding the payment of increased fees.

Executive Member of Bangladesh Insurance Association (BIA), Joint Secretary General of BIF and Chief Executive of Zenith Islami Life, S M Nuruzzaman said, the fees paid in November 2025, it does not seem reasonable to increase them in 2026. In this case, if IDRA wants, it can at least consider the issue of 2026 registration renewal and renew the companies’ registration by accepting the fees paid at the previous rate.

And if this is not reconsidered, the insurance companies may face complications in paying their extra fees, thinks S M Nuruzzaman.

Executive Member of Bangladesh Insurance Association (BIA) and Chief Executive of Asia Insurance, Imam Shaheen said, as per the rules, we paid the fees in November 2025 at the previous rate for the 2026 registration renewal. Meanwhile, the time for registration renewal has also ended.

In this case, according to the law, after the time has expired, the authority cannot charge fees again by amending the rules. However, how this issue will be resolved, BIA will take measures through discussion with the companies.

He said, according to the amended rules, the fees paid in 2025 have been increased from 1 taka to two and a half taka per thousand gross premium, where an additional one and a half taka has to be paid. This increased fee will create additional pressure on the insurance companies and as a result, the cost rate of the companies will increase, said Imam Shaheen.

The chief executive officer of another life insurance company, who did not wish to be named, said, we paid the registration renewal fee in November 2025. And this expense was determined based on the 2024 gross premium, which was shown as the 2025 expense. In this case, how can we now show expense for 2025 in February 2026!

He said, we do not see any logic in such a decision by IDRA. However, if the fee needs to be increased, it can be implemented from 2027, which can be shown as the 2026 expense. In this case, we can predetermine the expenses accordingly and operate the business.