No insurance agents in non-life sector, development officials to receive pay-scale salaries

Staff Correspondent: The Insurance Development and Regulatory Authority (IDRA) has introduced a regulatory reform in Bangladesh’s non-life insurance sector, eliminating individual insurance agents and mandating structured, pay-scale-based salaries for development officials. The new measures are outlined in Circular Non-Life: 109/2025, signed on Tuesday (Dec 23) by IDRA Executive Director (Non-Life) Monira Begum, and will take effect from January 1, 2026.

Under the circular, licenses of all individual agents working in the non-life sector have been suspended, effectively ending their role in the sector from 2026. IDRA said the decision followed recommendations from the Bangladesh Insurance Association (BIA), consultation with non-life insurers and concern over market discipline and transparency. With no valid individual agent license in force, insurers will no longer be permitted to pay commission to individuals. The authorities concerned also reiterated that, under Section 58(1) of the Insurance Act, 2010, commission or incentive of any kind cannot be paid to anyone other than a licensed insurance agent.

The circular introduces tighter control over remuneration practices, particularly for development officials. Salaries, allowances, or benefits linked to a percentage of premium collection have been strictly prohibited. Instead, non-contractual development officials must be appointed under clearly defined pay scales, with regular salaries paid in line with company-approved structure.

IDRA has further reinforced answerability by directing insurers to pay all salaries and benefits through designated management expense accounts, either via direct bank transfer or account-payee cheque, in accordance with its earlier circular (Non-Life: 64/2019). Companies must also submit detailed quarterly reports on development officials’ remuneration, starting January 2026.

The regulation will not apply to banks engaged in bancassurance or insurtech operators.

IDRA says that the reform is intended to safeguard policyholders, strengthen insurers’ economic stability and promote professionalism in the non-life insurance sector, urging all companies to ensure strict compliance.