Insurers told to shut 'double servers' within six weeks
A fully risk-based supervision system will be introduced in the insurance sector by December,
Insurance companies do not always provide the Insurance Development and Regulatory Authority (Idra) with accurate information, Idra Chairperson Mir Nadia Nivin has alleged, saying many use multiple or "double servers" to conceal data.
The regulator has given insurers six weeks to remove hidden or additional servers and consolidate all their data, warning that those who fail to comply will face legal action.
She made the remarks yesterday at the opening of a two-day residential workshop organised by the Insurance Reporters Forum (IRF) at the Bangladesh Academy for Rural Development (Bard) in Cumilla.
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Mir Nadia Nivin said information submitted by life and non-life insurers did not always reflect their actual financial condition. Multiple servers meant the regulator often lacked complete information on companies' businesses, premium income and finances.
"Within six weeks, hidden or additional servers must be removed and all information consolidated. Action will be taken against those who fail to do so," she said.
She added that technical audits would detect servers even if companies hid them in garages, under beds or elsewhere.
Risk-based supervision by December
A fully risk-based supervision system will be introduced in the insurance sector by December, the Idra chairperson said.
She said financial statements alone could not reveal a company's actual condition. Even if an audit report for 2025 was obtained in 2026, inaccurate information would make it difficult to identify current risks.
Unique policy IDs within 3-4 months
The Idra plans to introduce a "unique policy ID" within the next three to four months to improve transparency.
Like a bank account number, each policy will have a centrally identifiable number, reducing opportunities to show fake premium income, partially report business or conceal information.
The regulator also plans to make digital verification of cover notes through its system mandatory before banks open letters of credit for non-life insurance policies. Banks will not be allowed to open an LC without a unique cover note ID.
Claim payments to begin next week
The process of liquidating assets of seven to eight financially distressed insurers to repay outstanding claims will begin next week, Mir Nadia Nivin said.
Proceeds from assets including land, treasury bonds and fixed deposits have been kept in separate bank accounts under Idra supervision. Customers will be paid on a "first application, first payment" basis.
Citing Far East Islami Life Insurance, she said the company had around Tk3,000 crore in outstanding claims. Initial payments could begin with several hundred crore taka raised by selling land in Feni and liquidating some bonds.
The Idra also plans to coordinate with Bangladesh Bank, the National Board of Revenue and the Bangladesh Securities and Exchange Commission to strengthen verification and monitoring of insurers' information.
Mir Nadia Nivin said the Idra was regulating 82 insurance companies with only around 150 employees. She called for stronger legal and technological capacity and more institutionalised information-sharing among regulators.
