Bangladesh

Principal Legislation

Bangladesh’s insurance industry operates under core legislation introduced in 2010, supported by earlier acts that remain relevant. The core legislation currently applicable includes:

• Insurance Act 2010 (replaced earlier Insurance Act 1938 and consolidated all prior legislation)
• Insurance Development and Regulatory Authority (IDRA) Act 2010

Supervision

The Insurance Development and Regulatory Authority (IDRA), established in January 2011 under the IDRA Act 2010, is Bangladesh’s sole insurance regulator. It oversees all insurance companies, brokers, and intermediaries.

As of mid‑2025, draft amendments to the Insurance Act aim to empower IDRA with authority to dissolve boards, restructure failing insurers, cap family ownership at 10%, strengthen board independence rules, establish customer protection funds, and impose limits on agent commissions.

Admitted/Non-Admitted

Bangladesh requires all insurers to be licensed by IDRA. Non‑admitted or offshore insurers are not permitted to conduct business locally, except under narrowly defined circumstances such as marine export cargo insurance.

In Bangladesh, insurance business is primarily conducted through admitted insurers—those licensed and authorized by the (IDRA). Non-admitted insurers, meaning those not licensed locally, are generally not permitted to carry on insurance business unless a certificate is obtained from IDRA confirming that the risk is not insurable within Bangladesh. However, marine export and cargo insurance companies may operate without full admission, subject to regulatory approval. Overseas reinsurers do not require local admission but must be approved by the state-owned Sadharan Bima Corporation (SBC) to operate in the market. Non-admitted placements may be allowed in specific cases, subject to SBC’s approval.

Compulsory Insurance

• Motor third party personal injury and property damage
• Imports
• Aviation liability

State Involvement

• Sadharan Bima Corporation (SBC): State-owned non‑life insurer and key public sector reinsurer under IDRA supervision. Established via the Insurance Corporations Act 1973 and continuing underwriting public-sector risk
• Jiban Bima Corporation (JBC): State-owned life insurer, active since 1973 and regulated under the Insurance Act 2010 and related rules

Tariff Classes

The non-life insurance market in Bangladesh operates under a tariff system. Non-life insurers are required to adhere to the tariffs introduced by the Chief Controller of Insurance’s Central Rating Committee. Life insurers, on the other hand, apply their own premium rating tables.

Premium Taxes and Charges

In Bangladesh, nominal stamp duty charges apply to most classes of insurance business, while no premium taxes are payable. However, non-life insurance policies are subject to a 15% Value Added Tax (VAT).

Policy language

Policy language is primarily English, with increasing use of Bengali to improve accessibility for local consumers.

Since 2007-08, SBC has been unable to renew its surplus arrangements due to poor claims experience in industrial and commercial classes, particularly textile risks. Although claims experience has improved, reinsurance continues to be placed on an excess basis. SBC’s reinsurance premium income has shown steady growth, and overall profitability from both direct and reinsurance business has increased satisfactorily in recent years.

Bangladesh’s insurance sector is divided into life and non-life (general) segments, each governed by distinct regulations. Life insurers are free to arrange their reinsurance independently, typically engaging with both local and international reinsurers. In contrast, private non-life insurers are required to cede at least 50% of their reinsurance business to the state-owned Sadharan Bima Corporation (SBC), while the remaining portion may be placed with approved overseas reinsurer.

Private non-life companies distribute their products either directly or through dedicated development teams. In the life sector, the state-owned insurer uses its own sales force, while private life insurers rely on extensive branch and agency networks. Since December 2023, bancassurance has been officially introduced, allowing licensed banks to distribute insurance products. Adoption is growing, particularly among life insurers, and is expected to complement traditional channels without replacing them.

Bangladesh faces significant exposure to natural perils that continue to shape the country’s risk landscape. Earthquake risk is a long-term concern, with over a dozen magnitude 6.0+ events recorded since the late 19th century and increasing urban vulnerability near fault zones. Cyclones continue to pose a major threat to coastal and inland areas, with recent events such as Cyclones Amphan (2020), Mocha, Hamoon, and Midhili (2023) highlighting the scale and severity of impact. Seasonal flooding during the monsoon is a regular occurrence, affecting large portions of the country, particularly the low-lying deltaic south.