IDRA’s workforce reform sparks training uncertainty in non-life insurance
A K M Ehsanul Haque, FCII: Bangladesh’s non-life insurance sector is facing uncertainty after the Insurance Development and Regulatory Authority (IDRA) moved to phase out the long-standing commission-based, part-time sales model and directed companies to bring business development employees under permanent employment structure. Although the decision is being viewed as a push toward professionalism and stronger answerability, it has also exposed a critical gap: the future status and enforcement of mandatory training for the very workforce that shapes customers’ understanding, trust and purchasing decision.
For years, training in Bangladesh’s insurance industry has been treated as more than an internal skill-building routine. It has functioned as a protection for policyholders and a regulatory factor for maintaining transparency in a market where product terms may be technical, exclusions can be misunderstood and sales-driven competition may encourage overselling. The significance of training becomes even more pronounced for business development staff, who are often the first and sometimes the only human interface between insurers and customers. Their explanations influence customers’ choices, their promises set expectations and their conduct shapes perception regarding whether insurance is a reliable promise or a confusing product.
IDRA’s earlier regulatory approach reflected that reality. Training obligations were introduced for those engaged in selling insurance products, in particular, those executing under commission-based arrangement. In the non-life sector, mandatory training for financial associates served as a minimum quality benchmark. Industry insiders say that it assisted lessened misinformation and exaggerated claims during sales interaction, limited customers’ confusion and contributed to a more disciplined approach to distribution. It also signaled that selling insurance was not merely transactional, but needed a foundation of technical knowledge and ethical responsibility.
The fresh directive, however, alters the foundation of that system. By effectively declaring the part-time, commission-based model outdated and insisting on permanent employee status for business development employees, the regulator has begun reshaping the distribution ecosystem. The decision has been welcomed by those who believe that formalising employment can strengthen institutional answerability and reduce the informal sales practices that sometimes lead to mis-selling and disputes. Permanent staffing, in theory, may improve supervision, standardise customers’ engagement and align sales activity with corporate compliance obligations rather than morally personal incentives.
But this structural shift also complicates existing compliance assumptions. Training requirements were previously framed around a specific distribution model and the transition to a permanent workforce has caused confusion regarding whether the same training obligations still apply, whether they will be redesigned and how they will be enforced. In the absence of clear regulatory interpretation, companies may respond unevenly. Some may continue strong training management out of caution or commitment to best practice. Others may scale back due to uncertainty, assuming that training mandates tied to commission-based roles no longer apply in the same way. Such divergence could weaken the consistent quality control that training was meant to establish across the market.
Experts warn that this uncertainty comes at a time when training is questionably more important, not less. A business development team executing as permanent staff is likely to have broader responsibilities than a commission-driven agent. Their role may extend beyond convincing a customer to purchase a policy and move toward supporting customers throughout the insurance cycle, including advising on suitable coverage, ensuring accurate documentation, supporting renewals, guiding claims processes and managing complaints or service disruption. This expanded function needs a deeper and more standardised understanding of product structure, underwriting practices, disclosure norm, claim settlement procedures and regulatory expectation. Without robust training, the risk of improper explanation and unrealistic promises rises and procedural errors become more to be expected. When such failure occurs in insurance, they do not merely affect customers’ satisfaction; they may directly threaten economic safeguard at moment of loss, when customers rely on the policy to work exactly as understood.
Stakeholders also underscore that training is key to restoring and strengthening public confidence in non-life insurance. The industry continues to fight perception of complexity and uncertainty, often driven by disputes over exclusions, claim rejection and uneven expectation between what customers believe they bought and what the policy actually provides. In such a situation, a better employment structure alone cannot guarantee better outcomes. The knowledge and conduct of the staff interacting with customers remains the decisive factor. If training becomes optional, inconsistent, or diluted, the system may retain the same weaknesses under a fresh structure and the promise of reform may fail to turn into improved customers’ experience and robust market credibility.
In the sector, there is a mounting call for IDRA to provide immediate clarification through a formal directive that removes ambiguity and defines how training requirements will apply under the new permanent employment framework. Stakeholders want a clear confirmation that training remains mandatory for business development staff in non-life insurance, along with transparent guidance on the scope, structure and compliance expectation. Such clarity would enable companies to align their internal human resource strategies, allocate resources appropriately and maintain consistent standards across the market.
The regulatory shift toward permanent staffing has the potential to reshape the insurance distribution landscape and raise professional standards. But its success will depend on whether the reform is matched by a strong and enforceable training framework. In an industry where trust is built or broken at the point of sale, training is not an administrative detail. It is the backbone of responsible distribution, the foundation of consumers’ safeguard and a key assessment of whether structural reform will deliver meaningful change for policyholders and the market.
