Existing Laws of Insurance in Bangladesh

Suggested Material:

Chapter 27 of Khaledur Rahman’s Book

Mohammad Minhazur Rahman

Lecturer
Department of Law
State University of Bangladesh
Previous Law: Insurance Act 1938

It was repealed by Bima Ain 2010 (Insurance Act 2010)

 Another Act-

Insurance Development and Regulating Authority Act, 2010

(We will refer it to as IDRA Act 2010)

Section 3(1) of the IDRA Act 2010 establishes-

Insurance Development and Regulating Authority

(We will refer it to as IDRA)

It is obligatory (MUST) to have a registration certificate issued by

IDRA to conduct an insurance business in Bangladesh
 1 Chairman
4 Members
Appointed for a term not exceeding 3 years
 Registration of Insurer
Application Process

Section 8(2) of IDRA Act: Any person willing to carry on a life insurance
or non life insurance in Bangladesh must apply to the IDRA for a
registration certificate.

Insurer’s Registration Regulation 2013: Bank draft of 5 lakh taka

must be submitted to IDRA as the application fee.

IDRA may refuse the application within 40 days of receiving it.

Refused person may apply for REVIEW within 30 days of refusal.
 Quick Thought

Can a registration of Insurance company be cancelled or

suspended even after being registered by IDRA?

Grounds of Suspension and Cancellation – Section 10(1)
1. Failing to deposit amount specified by Bangladesh Bank under section 23 and 119 if
the IDRA Act.
2. Not commencing business within 1 year of registration
3. If carrying on the business become-
 Detrimental to policyholders
 Detrimental to the development of insurance industry
 Harmful to national interest
4. Being unable to meet obligations
5. Failing to maintain solvency margin
6. Failing to comply with IDRA
7. Immoral activity or malpractice
8. Not paying any claim under insurance policy within 3 months after Court’s
Judgment or direction of the IDRA
 Consequences of Suspension and Cancellation

1. Prohibition to issue any new policy

2. Prohibition on entering into new contracts

3. When an insurance company’s registration is cancelled under

section 10(1), as discussed previously, then IDRA may apply to

the court to wind up the company.

Revival of Renewal of
Registration Registration
Certificate Certificate
Revival of Registration Certificate

If a registration is cancelled, IDRA has the discretion to

revive it if previous wrongs [under section 10(1)] are undone

Grounds of Suspension and Cancellation – Section 10(1)
1. Failing to deposit amount specified by Bangladesh Bank under section 23 and 119 if
the IDRA Act.
2. Not commencing business within 1 year of registration
3. If carrying on the business become-
 Detrimental to policyholders
 Detrimental to the development of insurance industry
 Harmful to national interest
4. Being unable to meet obligations
5. Failing to maintain solvency margin
6. Failing to comply with IDRA
7. Immoral activity or malpractice
8. Not paying any claim under insurance policy within 3 months after Court’s
Judgment or direction of the IDRA
 Revival of Renewal
Registration of Registration
Certificate Certificate
 Renewal of Registration
Certificate

 Registration of an insurance company must be renewed

each year.

 An application to renew the registration should be made

to IDRA before 30th November of preceding year along

with prescribed fees.

Next Class Topics:

 Investigation by IDRA

 Offences of Insurance Companies

 Punishment of Insurance Companies

 Appeal Process

 Problems and Challenges in Bangladeshi Insurance Industry.