In a decisive move to restore financial discipline within the national insurance sector, the Bangladesh Insurance Association (BIA) has issued a formal directive mandating that all non-life insurance companies secure written undertakings from their respective branch managers. This initiative is designed to rigorously enforce the “Zero Commission Policy”, a regulatory framework established by the Insurance Development and Regulatory Authority (IDRA).
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The Enforcement Mechanism
On Monday, 23 February 2026, a letter signed by the Secretary of the BIA, Md. Omar Faruque, was dispatched to the Chief Executive Officers of all non-life insurance firms. The correspondence underscores a critical shift in the industry’s operational structure: as of 1 January 2026, all insurance agent licences under non-life companies have been suspended. Consequently, there is no longer a legal basis for the existence of active agents, nor is there any provision for the payment of commissions.
To ensure this transition is absolute, branch managers must now formally pledge their adherence to these new standards. This move aims to eliminate the historical practice of hidden commissions and unauthorised financial incentives that have long plagued the sector’s transparency.
Core Provisions of the Undertaking
The BIA has outlined several stringent conditions that branch managers must accept within their written pledges. These include:
Strict Adherence: Full compliance with company policies, the Insurance Act, and all directives issued by the IDRA.
Total Financial Transparency: Ensuring all premiums are deposited directly into the company’s official accounts through designated, verifiable processes.
Prohibition of Incentives: A total ban on accepting or providing any form of commission, financial benefit, or indirect incentive.
Accountability: Accepting that any violation of these rules will result in severe disciplinary action from both the parent company and the regulatory authorities.
Non-Life Insurance Policy Framework 2026
| Policy Element | Current Status / Requirement |
| Agent Licences | Suspended (Effective 1 January 2026) |
| Commission Rate | 0% (Zero Commission Policy) |
| Primary Compliance Officer | Branch Managers (via Written Undertaking) |
| Regulatory Authority | IDRA |
| Monitoring Body | Bangladesh Insurance Association (BIA) |
| Financial Goal | Direct Premium Deposit and Operational Transparency |
Strategic Implications
The BIA’s directive is viewed as a “clean-up” operation for the non-life segment. By making branch managers personally and legally accountable, the association hopes to dismantle the informal “middleman” culture. This shift is expected to lower operational costs for insurance firms, which may eventually lead to more competitive premium rates for the general public.
Following the collection of these undertakings, insurance companies are required to notify the BIA of their compliance. This structured reporting is intended to create a comprehensive database of compliant managers, making it significantly harder for illicit transactions to occur under the radar.