Bangladesh Insurers Face Delays in New Policy Issuance
Brokers in Bangladesh face delays of up to six months before issuing new policies due to cooling-off periods imposed by the Insurance Development and Regulatory Authority (IDRA). These measures target carriers that settle claims late, following a ban on tying payouts to new policy purchases.
The IDRA directive, issued on October 15, 2026, links a carrier’s claims settlement speed to how quickly new business can be written with the same customer. Settlement rates vary widely, with Baira Life Insurance at 1.6% and MetLife Bangladesh at 98.3%, according to IDRA data.
How Cooling-Off Periods Work
Insurers settling claims within the 90-day statutory period face no restrictions. Those settling between 90 and 120 days cannot issue new policies for 30 days after payment. Delays of 120 days or more trigger a 180-day restriction.
The overall life insurance claims settlement rate in Bangladesh dropped from 85% in 2020 to 66% in 2025. Among distressed insurers, rates are lower, with Baira Life Insurance settling 1.6% and Padma Islami Life Insurance settling 4% of claims.
For brokers, these cooling-off periods mean working with slower-settling carriers could significantly delay new business. This adds to existing pressures, as the IDRA also eliminated agent commissions in the non-life sector in January 2026.
Regulatory Changes and Market Impact
The IDRA’s directive aims to address policyholder dissatisfaction caused by insurers withholding claims unless customers bought new policies. The circular mandates insurers transfer the full claim amount in a single payment, with no deductions except government charges.
These changes come as roughly 1.2 million policyholders await unpaid life insurance claims worth Tk4,403 crore, according to IDRA data. Mir Nadia Nivin, IDRA chairman, stated selling policies without the ability to pay claims could amount to fraud.
Regional Trends in Claims Regulation
Bangladesh is not alone in tightening claims rules. Pakistan’s Securities and Exchange Commission proposed draft rules in August 2026, setting 20-day deadlines for life claims and 5-day deadlines for motor claims, with fines of up to PKR 1 million for violations.
