IDRA warns non-life Insurers against operating unapproved plans

Staff Correspondent: In a decisive move to reinforce discipline and transparency in the country’s insurance sector, the Insurance Development and Regulatory Authority (IDRA) has issued a stern warning to all non-life insurance companies, cautioning that any entity found operating or marketing unapproved insurance plans will face strict punitive action.

The warning was formalised through Non-Life Circular No. 107/2025, titled ‘Guidelines to be followed in operating insurance plans,’ issued on Saturday (26 Oct). The circular reflects IDRA’s fresh commitment to restoring order and credibility in an industry that has, for years, suffered from irregularities and lax compliance practices.

According to the directive, all non-life insurance schemes introduced before 2010 will be considered retrospectively approved- a pragmatic recognition of the market’s historical realities. However, any post-2010 insurance plans introduced without prior regulatory approval must now undergo an official approval process to continue operation.

The circular underscores two compliance conditions. During the pilot phase of any insurance plan, companies must strictly follow the provisions set out in GAD Circular No. 15/2023, issued on August 27, 2023, which provides procedural and operational guidelines for new insurance product piloting.

Failure to comply with these instructions will invoke severe penalties under the Insurance Act, 2010. Specifically, Section 130 empowers IDRA to take action against offending companies, while Section 134 enables the regulator to impose sanctions on individuals responsible for the violation.

The circular, issued with the approval of the competent authority and signed by Monira Begum, Executive Director (Joint Secretary) of IDRA, signals the regulator’s intent to curb unregulated practices and bring the entire insurance ecosystem under transparent and lawful operation.