IDRA to Introduce Digital Monitoring and Risk-Based Supervision to Restore Insurance Trust

By Staff Correspondent: The Bangladesh Insurance Development and Regulatory Authority (IDRA) has announced plans to accelerate digital transformation and move toward a risk-based supervision model to strengthen oversight and rebuild public trust in the life insurance sector.

The remarks came during a high-level meeting held on Thursday (June 25) at the IDRA headquarters with managing directors and chief executive officers of life insurance companies. The meeting was chaired by IDRA Chairman Mir Nadia Nivin.

The discussion focused on key challenges in the life insurance sector, particularly delays and complications in claim settlements. Industry representatives said several companies are facing financial pressure, affecting their ability to settle claims on time.

They warned that these issues are eroding customer confidence and weakening overall trust in the insurance sector.

Some participants also suggested introducing a one-time financial support package, similar to banking sector bailout measures, to stabilize struggling insurers.

In response, the Chairman said the possibility of a one-time support package could be considered. However, she emphasized that any such support must come with strict conditions to prevent repeat financial and operational weaknesses.

She stressed that stronger governance, accountability, and corporate discipline are essential before considering any financial intervention.

A key highlight of the meeting was the push for digital transformation in the insurance sector.

The Chairman said the regulator plans to introduce real-time, data-driven monitoring systems that will allow instant tracking of risk and operational performance, enabling faster regulatory action.

She also highlighted the need for a secure and structured digital infrastructure for data storage and management, noting that improved systems will enhance decision-making and regulatory efficiency.

IDRA confirmed its long-term plan to gradually shift from a compliance-based supervision system to a risk-based supervision (RBS) framework.

Under this approach, regulatory oversight will rely more on data analysis and risk assessment rather than routine inspections.

Officials believe this shift will help identify weak insurers earlier and improve financial stability across the sector.

The meeting also discussed ways to reduce policy lapse rates, a major concern in the life insurance industry. Participants emphasized reforms in commission structures, stronger actuarial capacity, and improved risk management practices.

The introduction of innovative products, including Takaful-based insurance offerings, was also discussed to expand the market and improve customer engagement.

At the end of the meeting, the Chairman said the regulator will strengthen collaboration with the insurance industry to improve overall sector performance.

She also announced plans to hold separate meetings with individual insurance companies in the coming weeks to review their specific challenges and opportunities.

The meeting was attended by IDRA members and senior executives from life insurance companies across the country.