IDRA, Finance Ministry Hold up Renewal Licences for 60 Bangladesh Insurers

By Staff Correspondent: Around 60 licensed life and non-life insurance companies in Bangladesh have yet to receive their 2026 registration renewals due to a dispute over increased licence renewal fees and a lack of coordination between the Insurance Development and Regulatory Authority (IDRA) and the Ministry of Finance. As a result, most private insurers in the country are effectively operating without renewed licences, creating uncertainty and business disruptions in the insurance sector.

Industry stakeholders say the situation is legally questionable because insurance companies submitted their renewal applications and paid the prescribed fees within the required timeframe. They say that delaying licence renewals despite receiving the fees is not legal and could have serious implications for the country's financial sector.

According to the Bangladesh Insurance Association (BIA), all insurance companies submitted their renewal applications and paid the required fees under the provisions of the Insurance Act, 2010 and the amended rules issued in 2018. Under Section 11(3) of the Insurance Act, once the authority receives the application and the prescribed fee, it is obligated to renew the registration. However, IDRA has accepted the payments but has not issued the licences, leaving the applications pending.

The dispute emerged after the Financial Institutions Division under the Ministry of Finance published a gazette notification on February 4, increasing the registration renewal fee from Tk 1.00 to Tk 2.50 per thousand taka of gross premium. Insurance companies have described the increase as excessive and financially burdensome.

Industry representatives say that under the new rate, a company with gross premium income of Tk 100 crore would see its renewal fee rise from Tk 10 lakh to Tk 25 lakh. The BIA has called for the immediate withdrawal of the increased fee, saying that it would place significant financial pressure on insurers.

According to IDRA's internal communications and official sources, six life insurance companies and 14 non-life insurers have already paid the increased fee and renewed their licences. However, more than 60 other insurers remain firm in their position that their 2026 renewals should be processed under the 2018 rules at the previous rate of Tk 1.00 per thousand taka of gross premium.

The prolonged dispute has created uncertainty in the insurance market and raised concerns about the regulatory environment of the sector.

In a letter sent to the Financial Institutions Division and signed by IDRA Deputy Director Md. Solaiman, the regulator said that it has to meet all of its expenses from its own income. The authority said its expenditure has increased significantly due to digitalisation initiatives, the development of a National Core Insurance Solution, and the establishment of several new institutions.

IDRA has therefore maintained its position that the revised fee of Tk 2.50 should be collected from insurers and has sought final guidance from the Ministry of Finance on the matter.

The regulator's letter also stated that representatives of the Bangladesh Insurance Association had agreed to seek government guidance on the issue.

However, a BIA representative who attended the meeting and requested anonymity disputed that claim. According to the representative, the association's position was that insurers had already paid the legally prescribed fees for their 2026 renewals by November 2025. Therefore, the renewals for 2026 should be completed under the 2018 rules, while any revised fee structure could be applied from 2027 onward. The representative also said there was no agreement to collect the higher fee of Tk 2.50 for the 2026 renewal period.

The dispute has already entered the legal arena. On April 20, Supreme Court lawyer Tanoy Kumar Saha served a legal notice in the public interest challenging IDRA's decision.

According to the notice, withholding licence renewals despite companies complying with all legal requirements is not legal and contrary to existing regulations. It warned that if the issue is not resolved and licences are not renewed under the 2018 rules within seven days, a writ petition will be filed before the High Court.

Industry experts warn that failure to renew registrations could have serious consequences. Without valid renewals, insurance companies may face legal obstacles in issuing new policies or settling insurance claims, potentially disrupting business operations and affecting confidence in Bangladesh's insurance and financial sectors.