Development and reform of Bangladesh’s insurance sector can only be achieved through the proper enforcement of existing legislation, experts have stressed. Speaking at a discussion in Dhaka on Saturday, they argued that the Insurance Act 2010 already provides the necessary framework for reform, but has not been implemented effectively.
The event, organised by Insurance News BD at the Dhaka Reporters Unity, focused on proposed amendments to the Insurance Act. Participants expressed concern that granting the Insurance Development Regulatory Authority (Idra) powers to approve appointments of senior company officials — including chairmen, additional managing directors, chief financial officers and company secretaries — could negatively affect corporate governance. They also warned that removing Schedule-1 from the Act would weaken management structures.
Speakers criticised Idra for failing to take meaningful steps to reform the industry following the July uprising. They noted that the authority had not acted to recover misappropriated funds from life insurance companies, settle outstanding claims for policyholders, or pursue legal action against those involved in embezzlement.
Former Idra member (Life) Sultan-ul-Abedin Molla delivered the keynote address, emphasising that Idra was established not only to regulate but also to promote development in the insurance sector. He argued that the proposed amendments focus heavily on regulation while neglecting measures to raise public awareness and expand insurance coverage in an underdeveloped and overlooked industry.
Kazi Md Mortuza Ali, Director General of the Bangladesh Institute for Professional Development, added that reform is a continuous process but warned that unclear definitions in the amendment would hinder implementation. He noted that while the law claims to protect customers’ interests, it places greater emphasis on regulation than on development.
Ali also highlighted several problematic provisions:
- Introduction of the term “investigator” with detailed qualifications, but little attention to risk science or risk management.
- A broad definition of “family” that includes grandchildren, which may complicate application.
- Provisions encouraging microcredit institutions to enter the insurance business, potentially undermining established insurers.
- Definitions of insurtech companies and corporate agents without clear guidance on their formation or appointment.
- Bancassurance practices where banks act as corporate agents, despite ambiguity in the law.
He further questioned why departmental officers had not been included in company structures, even though Idra would be empowered to approve appointments up to the level of CFO.
Speakers concluded that while the Insurance Act 2010 was designed for a ten-year period, the rationale for amending it now remains unclear. They urged policymakers to prioritise enforcement of existing laws rather than introducing changes that may complicate governance and hinder development.