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The Insurance Development and Regulatory Authority (IDRA) has moved to place 17 non-life insurance companies under special audit after identifying them as high-risk performers. This follows a similar crackdown on 15 life insurers facing claims-settlement complaints.

High-Risk Firms Targeted

IDRA Chairman Dr. M. Aslam Alam announced the audit drive at his first press briefing on July 10, citing weaknesses in governance, claim settlement and asset management. “These companies flagged in our recent risk assessment will undergo thorough scrutiny,” he said.

The 17 general insurers include:

• Islami Insurance Bangladesh
• Islami Commercial Insurance
• Express Insurance
• Continental Insurance
• Dhaka Insurance
• Takaful Islami Insurance
• Desh General Insurance
• Purabi General Insurance
• Provati Insurance
• Phoenix Insurance
• Mercantile Islami Insurance
• Republic Insurance
• Sikder Insurance
• Sonar Bangla Insurance
• Standard Insurance
• Bangladesh Co-operative Insurance
• Nitol Insurance

All but Bangladesh Co-operative Insurance are publicly listed.

Scope and Timeline

Letters will be dispatched to each CEO next week, appointing independent audit firms under a 30-working-day mandate. Auditors’ terms of reference include:

• Reviewing 2023 financials for compliance with the Insurance Act 2010
• Verifying premium collection, deposits, refunds, policy cancellations and reinsurance practices
• Assessing asset quality, database accuracy and management expenses
• Identifying individuals responsible for mismanagement for potential punitive action

Sector Challenges and Unpaid Claims

IDRA data show unpaid claims at 45% in life and 47% in general insurance. More than 5.4 million policies have lapsed over 14 years, leaving 1.1 million policyholders unable to recover dues. “Extreme distrust has set in after many insurers missed claim-settlement deadlines,” Dr. Alam warned.

Regulatory Reforms Underway

To restore confidence, the government has drafted the Insurance Resolution Ordinance 2025—modeled on bank resolution frameworks—to facilitate restructuring, mergers or liquidation of troubled insurers and grant IDRA powers to wind up directors’ personal assets if needed.

IDRA also plans tighter rules for appointing and removing CEOs, addressing a chronic shortage: 19 insurers have operated without a chief executive for up to three years. “Transparency, accountability and good governance are imperative to rebuild public trust,” Dr. Alam concluded.