New Guidelines Set Full Vehicle Insurance Values

The Insurance Development and Regulatory Authority of Bangladesh (IDRA) has recently issued updated guidelines establishing the Full Insured Value (FIV) for motor vehicle insurance. The new directive aims to enhance transparency, reliability, and accuracy in insurance premium calculations, claims settlement, and overall information management within the sector.

Under the revised framework, the FIV for new and reconstructed vehicles will now be directly determined based on the showroom invoice price. Previously, insurance valuations applied age-based depreciation, which often led to discrepancies and disputes between insurers and policyholders. IDRA officials have emphasised that the updated methodology will reduce potential conflicts and ensure clearer accounting standards in motor insurance transactions.

According to IDRA sources, the decision followed recommendations made at the 187th Central Rating Committee meeting on 9 December 2025 and was formally approved at the 193rd Board meeting on 6 January 2026. Subsequently, “Circular No. Non-Life 110/2026” was issued to inform all relevant stakeholders of the new regulations.

Key provisions of the updated FIV guidelines include:

For reference, the previous age-based depreciation schedule was as follows:

Insurance analysts have welcomed the reform, noting that the removal of ambiguous FIV calculations is expected to accelerate claim settlements, reduce disputes between customers and insurers, and enhance trust in the motor insurance sector. Experts further highlight that linking FIV directly to showroom prices for new and reconstructed vehicles will simplify policy issuance, improve risk assessment, and ensure precise premium and claims calculations.

By aligning motor insurance practices with international standards while safeguarding consumer interests, IDRA’s new guidelines mark a significant step in strengthening Bangladesh’s motor insurance sector.