IDRA Implements Fivefold Increase in Insurance Registration Fees

The Insurance Development and Regulatory Authority (IDRA) has sparked a firestorm of controversy within the financial sector following the publication of a gazette that drastically increases registration renewal fees. The move, which effectively raises costs by up to five times the previous rate, has led industry experts and stakeholders to question the legal validity of the decision, particularly its retroactive implications for the 2026 fiscal year.

The Legal Quagmire

Under the Insurance Act 2010, all insurance providers must apply for their annual registration renewal by 30 November of the preceding year. For the 2026 cycle, companies submitted their applications and paid fees based on their 2024 gross premium income by the November 2025 deadline.

However, on 4 February 2026, the IDRA issued an amendment to the Insurance Business Registration Fee Rules 2012, hiking the fees effective immediately for the very period for which applications had already been processed. Legal specialists argue that because the renewal window for 2026 closed on 31 December 2025, applying a new fee structure now is in direct conflict with Section 11(2) of the Insurance Act.

Escalating Fee Structure

The new regulations introduce a tiered increase that spans the next decade, a move described by industry insiders as unprecedented. Previously, the fee was a flat rate of £1 per £1,000 (or local currency equivalent) of gross premium.

Justification vs. Financial Reality

The IDRA defends the hike by citing the need to fund the “Integrated Insurance Management System” (IIMS), increase manpower, construct permanent headquarters, and establish professional bodies such as the Actuarial Society of Bangladesh.

However, the regulator’s own financial health suggests these increases may be unnecessary. In the 2020-21 financial year, IDRA reported a total income of 255.2 million BDT, with over 118.7 million BDT generated solely from registration fees. After expenses and taxes, the authority maintained a surplus of 111.6 million BDT, with total funds exceeding 1 billion BDT as of June 2021.

The “IIMS” Controversy

Central to the dispute is the IIMS (formerly UMP), a service used to send SMS notifications to policyholders. Insurance companies have long resisted paying for this via a third-party intermediary, arguing that their internal systems are more secure and cost-effective.

Following the political shifts of August 2024, the industry expected the interim government to scrap the controversial contracts associated with these services. Instead, the regulator rebranded the service and integrated its costs into the registration fee to bypass the refusal of many companies to pay the service charges directly.

Critically, the IDRA’s mandate to establish training institutes is also under scrutiny. Section 15(B) of the IDRA Act 2010 only empowers the authority to “encourage the development of training centres,” leaving the legal right to found and fund such institutions highly debatable.