The Insurance Development and Regulatory Authority (IDRA) has settled insurance claims worth Tk 14.51 crore for 2,549 customers of seven financially distressed life insurance companies by selling assets belonging to the troubled insurers.
The move is part of a wider effort to clear long-standing unpaid claims and restore confidence among policyholders who have been waiting for their money. IDRA has been overseeing the disposal of assets held by financially weak insurers and directing the proceeds towards outstanding claims.
According to the regulator, assets including land, government savings certificates and other investments are being sold to generate funds for policyholders. The proceeds are being kept in separate bank accounts under regulatory supervision before being distributed to eligible customers according to prescribed procedures.
IDRA Chairman Mir Nadia Nivin recently said the regulator had initially taken up a claim-settlement initiative involving seven to eight financially distressed insurance companies. Apart from land, the assets being considered include fixed deposits, government bonds and other investments held by the insurers.
Some assets have already been sold, while the disposal of others is under way. The proceeds will be deposited into separate accounts in the names of the respective companies. Older claims will then receive priority as payments are made in phases.
The initiative comes against the backdrop of a broader crisis in Bangladesh’s insurance sector. According to the regulator’s latest figures, around 1.2 million insurance customers still have unpaid claims. As many as 32 insurance companies are facing difficulties in settling outstanding claims, while the total value of unpaid claims had risen to around Tk 4,403 crore by 2025.
The life insurance sector has continued to account for a large share of the claims business. In 2024, life insurers faced total claims of around Tk 13,056 crore, of which Tk 8,609.50 crore was settled. This represented a settlement rate of 65.94 per cent.
The rate improved marginally in 2025, reaching 66.54 per cent. Despite the improvement, a sizeable portion of claims remained unsettled, leaving policyholders dependent on regulatory measures and the financial recovery of individual insurers.
The situation in the general insurance segment has been weaker. In 2024, general insurers faced claims amounting to approximately Tk 4,322 crore but paid only Tk 1,333 crore, resulting in a settlement rate of 30.84 per cent. The rate fell further to 25 per cent in 2025.
IDRA has attributed part of the wider confidence problem to the prolonged failure of some insurance companies to honour claims. Timely settlement of policyholders’ legitimate dues is therefore being treated as a key part of efforts to rebuild public trust in the sector.
Alongside the claim-settlement drive, the regulator is planning stronger supervision of insurance companies based on their financial risks. Under a proposed risk-based monitoring framework, companies facing greater financial vulnerabilities would receive closer regulatory scrutiny.
IDRA is also working towards introducing a unique identification number for every insurance policy. The system is intended to make information relating to policies and premium payments easier to maintain and verify, while improving transparency for both customers and regulators.
The regulator has also identified discrepancies between actual financial conditions and information presented in the financial reports of some insurance companies. There have also been allegations involving the use of undisclosed information repositories by some firms. To address such irregularities, companies have been instructed to integrate their information systems within a specified timeframe, with legal action possible for non-compliance.
For policyholders, however, the immediate concern remains unpaid claims. Selling assets to generate funds offers a route to recover money where distressed insurers lack sufficient liquidity to meet their obligations. The settlement of Tk 14.51 crore for 2,549 customers represents one such effort.
The larger challenge will be to extend the process across the sector, particularly as billions of taka in claims remain outstanding. Faster settlement, greater transparency in financial reporting and closer supervision of financially vulnerable insurers will be crucial if confidence in Bangladesh’s insurance industry is to recover.