IDRA Inspects 9 Insurers over Commission Payment Allegations

Press Release: The Insurance Development and Regulatory Authority (IDRA) has conducted inspections at nine insurance companies following allegations that commissions were being paid through various channels despite the suspension of individual agency operations.

In a press release issued on Tuesday (June 16), the regulator said that individual agency activities of non-life insurance companies had been suspended from January 1 this year. The decision was taken following an application by the Bangladesh Insurance Association (BIA) and with the consent of non-life insurers.

However, allegations have emerged that some companies continued to provide commissions in different forms, including salaries, allowances and ‘no claim bonuses,’ in an effort to collect business even after the suspension took effect.

Industry insiders say such practices are creating an unhealthy competitive environment in the insurance sector and are undermining the implementation of regulatory directives. They warned that these activities could harm good governance and disrupt a level playing field in the industry.

To verify the allegations and monitor compliance with existing laws and regulations, IDRA formed three inspection committees. Through a letter issued on June 4, the authority instructed the formation of separate teams to inspect the companies concerned.

The companies brought under inspection are: Provati Insurance PLC, Paramount Insurance PLC, Bangladesh National Insurance Company Limited, Crystal Insurance PLC, Asia Pacific General Insurance PLC, Union Insurance Company Limited, Global Insurance PLC, Karnaphuli Insurance Company Limited and Prime Islami Life Insurance PLC.

IDRA said the inspection reports will be submitted to the authority's vigilance team. If evidence of irregularities is found, appropriate actions will be taken against the concerned companies in accordance with the prevailing laws and regulations.

In this regard, IDRA Member (Non-Life Insurance) Mohammad Abu Bakar Siddique said the authority would examine the findings of the inspection reports and take necessary legal action if any violations are proven.