Dispute Over Retrospective Fee Hikes in Insurance Sector

The Insurance Development and Regulatory Authority (IDRA) has found itself at the centre of a burgeoning legal controversy following its directive to insurance companies to pay additional registration renewal fees for the year 2026. This mandate comes despite the fact that most firms had already settled their dues under the previous fee structure by November 2025.

Industry leaders argue that this retrospective application of the Insurance Business Registration Fee Rules (Amended) 2012 is not only a financial burden but a direct violation of the Insurance Act 2010.

The Legislative Impasse

Under the Insurance Act 2010, companies are required to apply for renewal by 30 November of the preceding year, with fees calculated based on the total gross premium collected in the most recent financial statement. While the government published a gazette on 4 February 2026, significantly increasing these rates, IDRA’s demand for “arrears” for the current 2026 cycle has been met with fierce resistance.

Legal experts point out that neither the Insurance Act 2010 nor the IDRA Act grants the regulator the authority to collect additional fees retrospectively based on a mid-cycle amendment.

Escalating Costs: The New Fee Structure

The amended rules introduce a staggered increase in registration costs over the next decade. Previously, the fee stood at ৳1 per ৳1,000 of gross premium. The new rates represent a sharp escalation, as detailed below:

Allegations of Coercion and Mismanagement

Sources suggest that this aggressive fee hike was initially conceived to settle outstanding bills for “Duar Services Limited,” a controversial SMS service provider. Following the July 2024 mass uprising, many insurance firms refused to pay for these services, prompting the regulator to bundle the costs into a five-fold increase in registration fees.

Furthermore, several Chief Executive Officers (CEOs) have alleged that IDRA is withholding registration certificates and issuing verbal threats via telephone, suggesting that companies failing to pay the “extra” ৳1.50 per thousand will have their operational licenses suspended.

Voices from the Industry

Brigadier General Md. Shafeek Shamim, psc (Retd.), Secretary General of the Bangladesh Insurance Forum (BIF) and CEO of Sena Insurance, argued that the hike should be deferred. “The increased rates should be implemented from 2027. Forcing retrospective payments for 2026 creates accounting chaos, as these expenses were already settled and recorded in the previous financial year,” he stated.

Similarly, Imam Shaheen, CEO of Asia Insurance, highlighted the logistical impossibility of the demand. “We paid our 2026 fees in November 2025 based on 2024 premiums. To change the rules in February 2026 and demand more is legally untenable. It places an immense and sudden strain on the management expenses of every firm in the sector.”

As the standoff continues, the Bangladesh Insurance Association (BIA) is expected to hold formal talks with the regulator to prevent a total deadlock that could see many companies technically operating without valid registration.