The Insurance Development and Regulatory Authority (IDRA) has introduced a new rule limiting the operational expenditure of life insurance companies’ head offices located abroad. The amendment, added as Rule 4 to the Life Insurance Business Management Expenses Maximum Limit Rules, 2020, was officially gazetted on 13 January 2026.
Under the newly incorporated regulation, if a life insurer’s principal office is situated outside Bangladesh, its expenditure may not exceed 3 per cent of the net premium income related to its life insurance business for the relevant fiscal year.
However, the regulation imposes two key conditions:
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The overseas head office expenditure will be counted within the existing expense ceiling under Rule 3 and cannot be considered an additional allowance.
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Any funds sent abroad to cover head office costs require prior approval from the regulatory authority before transfer.
Previously, the 2020 rules governing life insurance management expenses did not specify limits for head office spending abroad. Similarly, the Insurance Act 2010 mentioned expense limits for head offices but did not quantify them or address overseas expenditure.
In response, IDRA issued a 2022 notification detailing the permissible spending by foreign-based head offices, in accordance with Section 62 of the Insurance Act 2010. The prior notification prescribed that the head office expenses abroad be calculated as a percentage of net premiums, as follows:
| Premium Type | Net Premium Amount (BDT) | Maximum Expense Percentage |
|---|---|---|
| First-year premium | ≤ 20 billion | 1.00% |
| > 20 billion – ≤ 40 billion | 0.75% | |
| > 40 billion | 0.50% | |
| Renewal premium | ≤ 50 billion | 0.50% |
| > 50 billion – ≤ 100 billion | 0.40% | |
| > 100 billion – ≤ 150 billion | 0.30% | |
| > 150 billion – ≤ 200 billion | 0.25% | |
| > 200 billion | 0.20% |
This framework ensures that insurers maintain financial discipline while operating overseas, and continues to require prior approval from IDRA for any fund transfers.
Before the 2022 notification, the expenditures of MetLife’s head office in the United States were governed by regulations dating back to 1958, underscoring the need for modernised, standardised rules. The new amendment aligns the regulatory framework with contemporary financial practices and ensures transparency in the management of life insurance funds abroad.