IDRA Gains Authority to Inspect Insurance Firms

In a significant move to bolster transparency and accountability in Bangladesh’s insurance sector, the Insurance Development and Regulatory Authority (IDRA) is set to acquire the power to directly inspect and seize documents and assets from insurance companies and affiliated institutions. This measure is proposed under an amendment to the Insurance Act, 2010, aimed at curbing long-standing malpractice and strengthening regulatory oversight.

Key Features of the Proposed Amendment

Under the proposed changes, if allegations of fraud, illegal commissions, over- or under-settlement of claims, or other legal violations are raised against an insurance company, IDRA-authorised officials will be empowered to:

• Enter company premises

• Access lockers and cupboards

• Seize important documents and create copies

• Seek assistance from the police if necessary

The IDRA Chairman will authorise the officials to conduct these operations, and police support will be mandatory.

Investigation and Document Handling

The amendment also outlines strict rules for evidence management:

• Individuals refusing or concealing necessary documents may face action

• Unseized documents cannot be used in investigations

• Officials may interrogate individuals under oath, with statements admissible in court

• Seized documents can generally be retained for up to 180 days, and must be returned within 30 days post-investigation

• There is provision for appeal to the government against any seizure

Oversight of Insurance-Related Entities

IDRA’s expanded powers will allow it to:

• Inspect institutions and foundations financed by insurance companies

• Submit reports to relevant regulatory bodies if necessary

• Collect transaction and financial data from companies

Expert Opinions

Insurance analysts suggest that these powers will enhance discipline and accountability, though impartial oversight is essential to prevent misuse.

SM Ziaul Haque, an insurance expert, warned, “If IDRA acquires powers similar to the police, some individuals may benefit, but it may not serve the country’s broader interests.”

A director at the Bangladesh Insurance Association added, “We do not oppose reform, but the seizure powers could create apprehension among investors.”

Objectives of the Amendment

According to IDRA Chairman Dr Aslam Alam, the amendment, currently under ministerial review, aims to:

• Establish governance and transparency in the insurance sector

• Enhance consumer confidence

• Facilitate the sector’s growth

Summary of Proposed Powers

If implemented, the amendment is expected to significantly reduce fraudulent claims and illegal commissions, marking a crucial step towards good governance and integrity within Bangladesh’s insurance industry.