Renewal fees for insurers increased to strengthen oversight

Insurance sector has long been mired in a crisis of confidence, marked by poor claim settlement, weak financial capacity among insurers, and inadequate regulatory oversight. 
As a result, nearly 15 lakh policyholders are facing hardship. Against this backdrop, the Insurance Development and Regulatory Authority (IDRA) has decided to raise registration renewal fees for insurance companies, aiming to strengthen governance in the sector and enhance the regulator’s institutional capacity.
Following IDRA’s proposal, the Financial Institutions Division of the Ministry of Finance has amended the Insurance Business Registration Fee Regulations, 2012, issuing a fresh gazette notification to that effect. Sector stakeholders believe the revised fee structure will help reinforce IDRA’s financial strength.
Under the new notification, registration renewal fees have been fixed at Tk2.50 per thousand taka of gross premium for 2026-2028. 
For the following three years, 2029 to 2031, the rate will rise to Tk4 per thousand. From 2032 onward, the fee will increase to Tk5 per thousand taka of gross premium.
Currently, 35 life insurance companies and 45 general insurance companies operate in the country under licences issued by IDRA. The revised fees will apply to all licensed insurers.
When the regulations were first introduced in 2012, the renewal fee stood at Tk3.50 per thousand taka of gross premium. 
The rate was reduced to Tk1 in 2018. After nearly seven years, the fee structure has now been revised again under a phased, three-tier framework.
Strengthening regulatory capacity
IDRA says the primary objective of the fee hike is to improve its operational capacity. 
At present, the regulator’s annual income is around Tk12 crore, compared to Bangladesh Bank’s income of about Tk22,000 crore. 
Even after the revision, IDRA expects its maximum annual income to rise to around Tk25 crore, which it still considers modest.
“No independent regulatory authority can function effectively without adequate funding,” said IDRA spokesperson Saifunnahar Sumi. “Even after the revision, our income will not be excessive, but it will allow us to undertake essential reforms and strengthen supervision.”
She noted that while many countries levy regulatory charges on reinsurance or investment income, Bangladesh does not. Insurance companies, meanwhile, spend between 15 and 50% of their income on management expenses. 
Against this backdrop, IDRA had been receiving only 10 paisa per thousand taka of premium, which has now been increased to 25 paisa.
Rising costs of digital oversight
As part of efforts to improve transparency and modernise supervision, IDRA is implementing the National Core Insurance System (NCIS), which will require an initial investment of around Tk40 crore. 
Ongoing expenses related to data centre operations and system maintenance are also expected to increase.
According to IDRA estimates, operating the NCIS digital infrastructure and data centre will cost approximately Tk4.88 crore annually from 2026.
IDRA also pointed out that it does not have its own office premises. Acquiring land and constructing a permanent building is expected to cost more than Tk300 crore.
Additional funding will also be needed to strengthen institutions such as the Bangladesh Insurance Academy, the Institute of Actuaries of Bangladesh, and the Risk Management Institute to build professional capacity in the sector.
The authority said the phased increase in regulatory fees was finalised following consultations with the Parliamentary Standing Committee, insurance sector organisations, and other key stakeholders, incorporating their feedback into the final amendment.