Bangladesh is preparing for significant amendments to the Insurance Corporation Act, which may bring substantial changes to the country’s reinsurance market. If implemented, the reforms could create new challenges for the state-owned Sadharan Bima Corporation (SBC), particularly in areas involving government expenditure, foreign-funded projects, and reinsurance income.
Under the existing law, any government property or project involving foreign loans or financial guarantees must be underwritten 100 per cent by SBC. The draft amendment proposes relaxing this requirement, allowing internationally rated foreign companies to take on major reinsurance responsibilities.
SBC argues that as a fully state-owned entity, it provides guarantees beyond international standards. Therefore, imposing an international rating requirement is unnecessary and may lead to insurance premiums flowing out of the country.
The Insurance Development and Regulatory Authority has drafted the amendment and is revising it after receiving departmental feedback. Long-standing disputes remain regarding claim settlements and outstanding premiums between private insurers and SBC.
Latest records show that private companies owe Tk 11.23 billion in premiums to SBC, whereas SBC owes Tk 9.30 billion in approved claims to the companies. Private insurers allege delayed settlements, while SBC claims that companies fail to pay their premiums on time.
Outstanding Dues
| Party | Amount Due | Year |
|---|---|---|
| Companies → SBC | Tk 11.23 billion | 2024 |
| SBC → Companies | Tk 9.30 billion | 2024 |
Tarikur Rahman, adviser at Green Delta Insurance, said mandatory reinsurance should not be imposed through an institution that delays settling claims. He welcomed market liberalisation.
Dhaka University Professor Md Main Uddin stated that the insurance sector is weak and public trust is low. Full liberalisation could push SBC into further difficulty. He said maintaining some level of mandatory reinsurance is essential.