Monjur Rahman purchased a life insurance policy from Fareast Islami Life Insurance Company in 2012, hoping to safeguard his family’s future. When the policy matured in 2022 with a claim of Tk 11.19 lakh, he submitted all the required documents but has yet to receive a single payment.
“Despite repeated requests, the company delayed every step. Even when my father was hospitalised, my request for partial settlement to cover medical bills went unanswered,” Rahman said.
Under the Insurance Act 2010, life insurers are legally required to settle claims within 90 days of receiving all documentation. Yet delays persist as the sector faces a severe liquidity crunch. In 2023, nearly 10 lakh policyholders were awaiting payouts from 29 companies, amounting to Tk 3,050 crore in unpaid claims. The situation has further worsened.
Latest data from the Insurance Development and Regulatory Authority (Idra) shows that around 12 lakh policyholders remain unpaid, with 32 insurers struggling to meet obligations. Seven companies report the lowest settlement rates, while unpaid claims have surged to Tk 4,403 crore as of 2025.
Officials and analysts attribute the crisis to financial mismanagement, corruption, poor investments, high administrative costs, and aggressive competition. Companies are now attempting asset sales, seeking loans, and implementing recovery strategies, but weak regulatory oversight continues to hamper progress.
In 2025, life insurers settled Tk 8,754 crore in claims, covering just 66.06% of total filed claims, down from 85% in 2020. By comparison, global settlement rates average 97–98%, and Indian insurers paid 98% in 2022–23.
Life Insurance Settlement Performance (2025)
| Insurer | Claims Reported (Tk crore) | Claims Paid (Tk crore) | Policyholders Waiting (Lakh) | Settlement Rate (%) |
|---|---|---|---|---|
| Fareast Islami Life | 3,442 | 214 | 5.66 | 6 |
| Padma Islami Life | – | – | – | 4 |
| Progressive Life | – | – | – | 21 |
| Golden Life | – | – | – | 11 |
| Sunflower Life | – | – | – | 5.5 |
| Baira Life | – | – | – | 1.6 |
| Akij Takaful Life | – | – | – | 100 |
| Alpha Islami Life | – | – | – | 100 |
| Life Insurance Corporation of Bangladesh | – | – | – | 100 |
| Mercantile Islami Life | – | – | – | 100 |
Fareast Islami Life faces major irregularities, including Tk 2,367 crore embezzled and Tk 432 crore in accounting discrepancies. Funds were diverted through inflated land purchases and loans backed by Mudaraba Term Deposit Receipts (MTDRs). Other insurers report similar challenges due to past mismanagement and unprofitable investments.
Executives from affected insurers emphasised that historical corruption, misappropriation, and liquidity shortfalls are at the heart of delayed payments. Many companies are pursuing land sales or government loans to improve cash flow, but the process is slow.
Experts warn that unless regulators implement reforms—including consolidating weak firms and expanding mandatory insurance coverage—the sector will continue to fail millions of policyholders waiting for their legitimate claims.
