Written by The Banking Post
Bangladesh’s insurers are seeking more time to review a draft law that would give the Insurance Development and Regulatory Authority (IDRA) sweeping powers to intervene in troubled companies, including restructuring or liquidating them, in a bid to restore confidence in the sector.
The Bangladesh Insurance Association (BIA), the umbrella body of private insurers, confirmed it had secured an extra month to respond to the proposed Insurer Resolution Ordinance 2025. The ordinance, modelled on the country’s bank resolution framework, is part of the interim government’s broader reform push.
“We have again sought one month, and the regulator has agreed. It will take time for us to provide feedback,” said BIA President Sayeed Ahmed.
Under the draft law, IDRA would be able to appoint administrators, replace management, transfer assets and liabilities to newly created “bridge insurers,” or liquidate distressed firms. It also allows liquidation of directors’ personal assets if fraud or embezzlement is proven.
The move comes amid rising frustration among policyholders, especially in life insurance, over delays and non-payment of claims on maturity. Analysts say the ordinance represents the most significant attempt in decades to address chronic weaknesses, including alleged malpractice and long-standing non-performing claims.
Officials said the framework would apply to both life and non-life insurers, though the latter are seen as relatively healthier. Government or development partners may provide bridge financing during restructuring, they added.
The BIA is set to review the draft ordinance at an executive committee meeting today, signalling the urgency of reforms that could reshape the structure and credibility of Bangladesh’s insurance industry.
