Supervision and Control

Principal Legislation

  • Insurance Act 2010 replaced the Insurance Act 1938
  • Insurance Development and Regulatory Authority Act 2010
  • Insurance Rules of 1958
  • Insurance Corporations Act of 1973
  • Insurance (Amendment) Ordinances of 1984


A new insurance regulatory office known as the Insurance Development and Regulatory Authority (IDRA) has been set up by the government, some 10 months after the Insurance Development and Regulatory Act 2010 providing for such a body was passed by the Bangladeshi parliament. The new authority replaces the office of the Chief Controller of Insurance.

The IDRA will operate in accordance with the provisions of the new insurance laws of March 2010 which were introduced with a view to reforming the poorly regulated market. The authority’s first task will be to frame rules that will determine how the new laws will work in practice.

Admitted / Non-admitted

Non-admitted insurance is not permitted except in the case of marine export cargo and companies located in the export processing zones. Non-admitted placement may also be permitted if a certificate is obtained from IDRA confirming that the cover is not insurable in Bangladesh. Overseas reinsurers do not have to be admitted, but have to be approved by the Sadharan Bima Corporation (SBC).

Compulsory Classes

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

State Involvement

The two state-owned insurers Sadharan Bima Corporation (SBC) (non-life) and Jiban Bima (life).

Tariff Classes

Non-life insurers are obliged to follow the tariffs originally introduced by the Chief Controller of Insurance’s Central Rating Committee. Life offices apply their own premium rating tables.

Premium Taxes and Charges

Nominal stamp duty charges apply to most classes of business while no premium taxes are payable. Non-life policies are subject to a 15% VAT.

Policy Language

The policy language is English although Bengali is being used to an increasing extent.

Non-Life (P&C) Insurance Market

Since 2007-08, SBC has been unable to renew its surplus arrangements because of a poor claims experience in industrial and commercial classes, not least textile risks. There has been some improvement as far as claims are concerned but reinsurance continues on an excess basis. SBC’s reinsurance premium income shows steady growth. Overall profitability from both direct and reinsurance business has increased satisfactorily.

Reinsurance Market

Private non-life companies must place 50% of their reinsurance requirements with the state-owned direct writer, Sadharan Bima Corporation (SBC). Life companies are free to reinsure as they wish.

Distribution Channel

Private non-life companies distribute their products through direct handling with clients or through development. In the life sector, the state company distributes its product throught its own sales force and private companies rely on extensive branch and agency networks.

Natural Hazards

Between 1869 and 1983 there were 11 earthquakes of 6.0 or more on the Richter scale that hit Bangladesh. This suggests a serious earthquake occurs about every 10 years. Bangladesh is also prone to severe cyclones, which not only hit the exposed areas of the mouths of the Ganges Delta and Chittagong but can affect the interior as well. Flooding occurs almost every year during the monsoon season and large areas may be affected, particularly in the south, which is flat and mainly deltaic.