Regulatory Row: IDRA Faces Legal Scrutiny Over Fivefold Hike in Insurance Fees

The Insurance Development and Regulatory Authority (IDRA) has ignited a firestorm of controversy within the financial sector following its decision to quintuple insurance registration renewal fees. On 4 February 2026, a gazette was published significantly amending the Insurance Business Registration Fee Rules 2012. However, the timing and retrospective nature of this increase have led experts and industry stakeholders to question the legal validity of the move.

The Conflict of Timing and Law

According to the Insurance Act 2010, all insurance companies must apply for their annual registration renewal by 30 November of the preceding year. Consequently, for the 2026 operational year, companies submitted their applications and paid the requisite fees—based on their 2024 gross premium income—by late 2025.

Legal experts argue that because the 2026 renewal process was technically concluded under the existing fee structure before the new gazette was published, the retroactive application of increased fees is a violation of established legal principles. Sections 8 and 11 of the 2010 Act explicitly state that business cannot be conducted without a valid certificate, the application for which must be accompanied by the “prescribed fee” at the time of submission.

The New Fee Structure: A Gradual Surge

The amended rules outline a steep, tiered increase in fees over the next decade. Previously, the renewal fee stood at a flat rate of £1 per £1,000 (or 1 Taka per 1,000 Taka) of gross premium. The new structure represents a significant financial burden:

Controversial Justifications

The IDRA defends the hike by citing the need to fund the Integrated Insurance Management System (IIMS)—formerly known as the controversial UMP—and to establish new professional bodies such as the Bangladesh Chartered Insurance Institute (BCII).

However, the industry remains sceptical. Critics point out that the IDRA is already financially robust; in the 2020-21 fiscal year, the regulator saw a surplus of over £11 million (11.16 crore Taka) with total funds exceeding £100 million. Furthermore, insurance providers argue that the forced IIMS messaging service, which charges per SMS, is an unnecessary third-party expense that compromises data security and adds no value to their existing in-house digital systems.

A Breach of Mandate?

Questions also remain regarding the IDRA’s authority to establish educational institutions. While Section 15(b) of the 2010 Act empowers the regulator to “encourage the development of training centres,” it does not explicitly grant the power to found and fund them using industry levies. As the interim government reviews the legacy of previous administrations, many in the sector had hoped for the cancellation of controversial third-party service contracts rather than their rebranding and expansion.