BIA directs non-life insurers to comply with zero commission mandate

Staff Correspondent: The Bangladesh Insurance Association (BIA) has directed all non-life insurance companies to collect written pledges from their branch managers to ensure strict enforcement of the ‘zero commission policy,’ following a regulatory move aimed at strengthening transparency and discipline in the sector.

The instruction comes in line with a circular issued by the Insurance Development and Regulatory Authority (IDRA). In a letter signed on February 23 by BIA Secretary Md. Omar Faruk and sent to the chief executive officers of all non-life insurers, the association outlined the steps required to comply with the regulator’s decision.

According to the letter, IDRA has suspended the licenses of all insurance agents operating under non-life insurance companies, effective January 1, 2026. From that date, no agent license will remain valid and companies will not be permitted to pay any commission. The decision marks a significant shift in the operational structure of the non-life insurance business, which has long depended on commission-based agent networks.

To support the implementation of the policy, BIA has asked companies to obtain signed declarations from all branch managers. In the pledge, managers must commit to strictly following company policies, the Insurance Act and all regulatory instructions. They must also confirm that they will not offer or accept any commission, financial benefit, or incentive, either directly or indirectly.

Branch managers are further required to ensure that all premiums are deposited into official company accounts through approved procedures and to avoid any illegal or irregular transactions. They must also agree to accept disciplinary action in case of violations.

The initiative is expected to promote greater accountability, reduce unethical practices and restore confidence in the non-life insurance sector ahead of the policy’s full enforcement in 2026.