The Insurance Development and Regulatory Authority (IDRA) has set a target of raising the insurance claim settlement rate from 57 per cent in June to at least 75 per cent, as the regulator confronts unpaid claims worth around Tk70 billion.
IDRA Chairman Mir Nadia Nivin announced the target at a programme held at the regulator’s office in the capital on Monday. She said the authority had adopted a two-pronged strategy to gradually clear the backlog and improve the overall performance of the insurance sector. She did not, however, specify a deadline for reaching the 75 per cent target.
Under the strategy, IDRA is holding meetings with owners and chief executives of insurance companies to identify the reasons behind delays in settling legitimate claims. The discussions cover operational difficulties as well as compliance-related issues that may be preventing companies from releasing money owed to policyholders.
At the same time, the regulator is closely monitoring insurers facing financial difficulties. The aim is to assess their ability to meet outstanding obligations while putting pressure on them to settle valid claims as quickly as possible.
Monday’s event marked the second phase of a special claim settlement initiative. Under this phase, five life insurance companies paid Tk230.4 million in long-pending claims to 5,868 policyholders.
Ms Nivin, who took charge of IDRA in July, said the speedy settlement of legitimate long-overdue claims was among her main priorities. She said the initiative was intended not only to protect policyholders’ rights but also to restore discipline and rebuild public confidence in the insurance industry.
The funds used for the latest payments were mobilised through several sources, including the sale of assets and the encashment of security bonds held by the companies concerned.
The IDRA chairman said the regulator was conducting one-to-one governance review meetings with insurance companies to understand why valid claims had remained unpaid. These reviews are intended to identify specific operational weaknesses and compliance problems and determine how they can be addressed.
“Some companies have ancillary and compliance-related problems,” she said, adding that IDRA was working with the relevant parties to resolve such difficulties quickly.
According to Ms Nivin, around eight of the country’s 82 insurance companies are facing serious difficulties. The inability of some of these life insurers to settle claims on time has damaged public confidence beyond the individual companies involved.
The troubled insurers are being handled separately, but IDRA’s intervention covers the wider industry. The regulator is also keeping companies with moderate problems under closer supervision, reviewing their financial strength and pressing them to accelerate payment of legitimate claims.
Finance minister backs insurance reforms
Finance and Planning Minister Amir Khosru Mahmud Chowdhury praised IDRA’s reform efforts during a visit to its office on Monday. He particularly welcomed measures aimed at strengthening governance, transparency and accountability across the insurance sector.
The minister said paying policyholders their rightful dues was essential to restoring confidence in insurance. Visible action on long-pending claims, he said, could help rebuild trust among customers who have been waiting for years for payments.
Mr Khosru also said the government was supporting IDRA’s efforts to make insurance companies more effective, efficient and dynamic through risk-based supervision.
He stressed that protecting policyholders’ rights and interests should remain a central priority. Complaint-handling systems and mechanisms for monitoring customer services also need to be strengthened so that policyholders receive better protection, he said.
The minister also highlighted the need for greater public awareness of insurance, financial security and risk management. He said IDRA’s reforms should make insurance easier for ordinary people to understand and access while improving confidence in the sector.
He expressed hope that the reform measures under Ms Nivin’s leadership would help create a stronger, more transparent and customer-focused insurance industry capable of making a greater contribution to the national economy.
Second phase follows earlier claim payments
The latest payments follow the first phase of the special settlement initiative, carried out on 3 September. During that phase, IDRA facilitated the settlement of Tk145.1 million in claims for 2,549 policyholders of seven life insurance companies.
The first phase covered policyholders of Baira Life, Fareast Islami Life, Golden Life, Homeland Life, Padma Islami Life, Progressive Life and Sunflower Life Insurance.
In the second phase, Padma Islami Life Insurance paid around Tk120 million to 3,600 policyholders. Homeland Life Insurance settled Tk49.8 million for 1,145 policyholders, while Fareast Islami Life Insurance paid Tk50 million to 580 policyholders.
Sunflower Life Insurance settled Tk5.53 million in claims for 300 policyholders, and Sunlife Insurance paid Tk5.01 million to 243 policyholders.
The figures underline the scale of the regulator’s ongoing effort to address a longstanding problem in the insurance industry. Thousands of policyholders have been left waiting for legitimate dues, in some cases for prolonged periods, while financial and governance problems at some insurers have made settlement more difficult.
IDRA said the process would continue. Remaining valid but unpaid claims will be verified and scrutinised before settlement, with the regulator seeking to ensure that legitimate policyholders receive the money they are entitled to.
The broader challenge now is to sustain the settlement drive while improving the financial health, governance and compliance of insurance companies. Raising the claim settlement rate to at least 75 per cent would represent a significant improvement from the 57 per cent recorded in June, but the regulator has yet to set a specific timeframe for achieving that goal.
