The Insurance Development and Regulatory Authority (IDRA) has conducted inspection activities at nine insurance companies following allegations that commissions continued to be paid through various channels despite the suspension of individual agency operations.
The regulator disclosed the development in a press release issued on Tuesday, 16 June.
According to IDRA, individual agency activities of non-life insurance companies were suspended from 1 January this year following an application by the Bangladesh Insurance Association (BIA) and with the consent of the non-life insurance sector. The suspension was intended to halt individual agency-based business operations within the industry.
However, allegations subsequently emerged that some insurance companies continued to provide commission-related benefits in different forms, including salaries, allowances and “no-claim bonuses”, with the objective of attracting and retaining business despite the suspension of individual agency activities.
Industry stakeholders have argued that such practices could create an unhealthy competitive environment within the insurance sector and undermine the implementation of regulatory directives. Concerns have also been raised that the continuation of such activities may affect governance standards and the principle of fair competition among insurance providers.
In response to the allegations, IDRA formed three inspection committees to verify the claims and monitor compliance with existing laws, regulations and regulatory instructions. Through a letter issued on 4 June, the authority instructed the formation of separate inspection teams to examine the activities of the companies concerned.
Companies Under Inspection
The nine insurance companies brought under the inspection programme are listed below:
| No. | Company |
|---|---|
| 1 | Prabhati Insurance PLC |
| 2 | Paramount Insurance PLC |
| 3 | Bangladesh National Insurance Company Limited |
| 4 | Crystal Insurance PLC |
| 5 | Asia Pacific General Insurance PLC |
| 6 | Union Insurance Company Limited |
| 7 | Global Insurance PLC |
| 8 | Karnaphuli Insurance Company Limited |
| 9 | Prime Islami Life Insurance PLC |
The inspections are aimed at determining whether the companies complied with the suspension of individual agency operations and whether any commission-related payments were made in violation of regulatory directives.
IDRA stated that the inspection findings will be submitted to the authority’s Vigilance Team for further review. The reports will be used to assess the validity of the allegations and evaluate whether any company breached applicable rules or regulatory requirements.
Regulatory Review Process
| Item | Details |
|---|---|
| Regulator | Insurance Development and Regulatory Authority (IDRA) |
| Inspection Committees Formed | Three |
| Letter Issued for Inspections | 4 June |
| Suspension of Individual Agency Activities | 1 January |
| Sector Concerned | Non-life insurance companies |
| Next Step | Submission of reports to Vigilance Team |
IDRA further stated that any evidence of irregularities identified during the inspections would be dealt with in accordance with existing laws and regulations. Regulatory action may be taken against the relevant institutions if violations are substantiated through the review process.
Commenting on the matter, IDRA Member (Non-Life Insurance) Mohammad Abu Bakar Siddiq said the authority would examine the inspection reports to determine the accuracy of the allegations. He added that if any irregularities are proven, appropriate measures would be taken under the applicable legal and regulatory framework.
The inspections represent a regulatory effort to assess compliance with the suspension of individual agency operations and to ensure adherence to the rules governing commission payments within the insurance sector. The outcome of the process will depend on the findings contained in the inspection reports and the subsequent evaluation by the authority’s Vigilance Team.