Insurance renewal fee may remain at Tk 1 as IDRA proposes to FID

Staff Correspondent: The Insurance Development and Regulatory Authority (IDRA) has made a proposal to the Financial Institutions Division (FID) of the Ministry of Finance that the insurance company renewal fee may be maintained at Tk 1 per thousand gross premium for 2026.

In an issued letter on Thursday (25 June), the authority stated that the existing rate may remain same for the next year subject to the approval from the Financial Institutions Division. The proposal was made by the newly appointed chairman and members of the regulator after discussing with industry stakeholders.

According to the letter, the decision was made following consultations with the Bangladesh Insurance Association (Bangladesh Insurance Association), which is an association representing both life and general insurance companies in the private sector.

Previously, on 4 February, the Financial Institutions Division published a gazette notification raising the renewal fee to Tk 1 from Tk 2.50 per thousand gross premium. This decision has raised concerns among insurance companies as they have opined that the raised fee would put substantial financial burden on the sector.

As per industry players, with the new revision, a company with Tk 100 crore gross premium would have to pay Tk 25 lakh in terms of renewal fee while with the earlier rate it was Tk 10 lakh only. The Bangladesh Insurance Association was also against the increased rate calling it a further burden on the industry.

Nevertheless, on 23 June, the Financial Institutions Division directed the insurers to charge the revised Tk 2.50 per thousand for the 2026 renewal period.

In accordance with the above instruction, Insurance Development & Regulatory Authority has now officially asked the Financial Institutions Division to review their decision and revert back to the earlier Tk 1 per thousand rate for 2026.

The ultimate decision on renewal fees now lies with the Financial Institutions Division.