The Insurance Development and Regulatory Authority (IDRA) has summoned four life insurance companies to justify their failure in settling claims amounting to Tk 2.65 billion last year. They have seven working days to respond.
The notices were issued to Sunflower Life Insurance, Progressive Life Insurance Company, Sunlife Insurance Company, and Homeland Life Insurance Company on March 13, based on their unaudited financial reports.
According to the Insurance Act, 2010, insurance claims must be settled within 90 days of policy maturity.
Sunflower Life left 71 percent of its Tk 1.32 billion claims unsettled, Progressive 61% of Tk 1.66 billion, Sunlife 49% of Tk 1.03 billion, and Homeland 29% of Tk 614.6 million.
An IDRA official, speaking anonymously, attributed the failure to corruption and irregularities causing a liquidity crisis.
Bangladesh is home to 35 life insurance and 46 non-life insurance companies.
In 2023, Bangladesh’s insurance sector settled claims at a rate of 65.19%, up from 61.16% the previous year, according to the regulator. However, the global average for claim settlements is much higher at 97-98%.
A 2023 report from the Swiss Re Institute highlighted Bangladesh’s low insurance penetration, with just 0.50% of its population covered, ranking it the lowest among Asia-Pacific countries.