IDRA’s Letter Seeking Information on Paid-up Capital Creates Confusion among Insurance Companies

Staff Correspondent: Confusion has spread across the insurance sector over two separate letters issued by the Insurance Development and Regulatory Authority (IDRA) seeking information on the paid-up capital of life and non-life insurance companies in the country. Chief Executive Officers and Chief Financial Officers of insurance companies have fallen into difficulty while trying to respond to these letters from the regulatory body.

According to information, on 6 September 2026, two separate circulars were issued by the Life and Non-Life divisions of IDRA. The letter signed by Md. Iftekharul Islam, Deputy Director of the Life Division, asked companies to fill in a prescribed form within 3 working days, while the letter signed by Md. Solaiman, Deputy Director of the Non-Life Division, asked for the same within 2 working days. The form requires details of in which bank, which branch, and in what type of account the company’s paid-up capital is held.

The form in the letter mentions three heads for showing the paid-up capital money: FDR, savings account, and others. For non-life insurance companies, the regulatory body has even demanded all supporting bank documents as proof of the information.

Under Section 21 of the Insurance Act 2010, at the time of registration or approval of an insurance company, the promoters must deposit their respective portions of the 18 crore taka paid-up capital free of any liability (as MTDR/FDR) in an approved bank. At the same time, under Section 23 of the Act, a statutory deposit of 1.5 crore taka must be maintained in the name of the insurance company with Bangladesh Bank through treasury bonds or approved securities. In both cases, the amounts must be kept under lien in favour of IDRA.

At the stage of initial approval, there is no legal scope to keep the capital money idle in a savings or any other current account under any circumstances. Yet IDRA’s form has included columns asking whether the paid-up capital is held in a savings account or under “others.”

In addition, many insurance companies that have been operating for years have increased the size of their paid-up capital by issuing bonus shares to shareholders from profits or retained earnings. Issuing bonus shares does not bring any new cash into the organisation; rather, internal equity is capitalised. It is not possible to identify in which bank account or which FDR that capital money is held.

On condition of anonymity, the Chief Executive Officer of a leading life insurance company said that after approval, the capital of any financial institution is used in various profitable sectors and in day-to-day operational activities. Paid-up capital never remains deposited in a bank’s savings account.

In this case, the form sent by the Insurance Development and Regulatory Authority needed to divide the heads more clearly, that is, it should have mentioned the heads in accordance with the provisions for investment.

Otherwise, many companies will face problems in providing the capital accounts in the currently sent form.

Regarding the letter seeking information on the paid-up capital of insurance companies, Sadiq Arman, Consultant (Public Relations) of the Insurance Development and Regulatory Authority, said that if any amendment is needed in the three columns mentioned for providing information on the paid-up capital of insurance companies, the authority will review it and take necessary measures.

It is to be noted that according to information from IDRA and the CSE, the authorised capital of the 35 government and private life insurance companies currently operating in the country totals 4,645 crore taka. The paid-up capital amounts to 1,251 crore 50 lakh taka. This figure does not include the foreign-owned MetLife.