Government Upholds Higher Registration Renewal Fees for Insurance Firms

The Ministry of Finance has rejected pleas from insurance sector owners by directing all life and non-life insurance companies to pay their registration renewal fees for 2026 at a significantly higher rate. According to an official directive issued on Tuesday, 23 June, by the Insurance-2 branch of the Financial Institutions Division (FID), the fee remains fixed at 2.50 Taka per 1,000 Taka of gross premium.

The mandate was sent directly to the Chairman of the Insurance Development and Regulatory Authority (IDRA). It instructs the regulatory body to take the necessary administrative steps to collect the fees in accordance with the timelines and rates outlined in the latest gazette, under Rule 3(2) of the Insurance Business Registration Fee Rules, 2012.

This decisive order follows a previous communication sent by the IDRA to the FID on 26 April. In that letter, the regulator sought legal clarification and specific guidelines regarding the exact applicable rates for private insurance firms for the upcoming 2026 calendar year. The FID response firmly clarifies that the government will not back down from its revised tariff structure.

The roots of the current dispute trace back to 4 February this year, when the FID published a controversial gazette notification. The state document abruptly raised the registration renewal fee from 1.00 Taka to 2.50 Taka per 1,000 Taka of premium, marking a 150 per cent hike. Insurance operators have voiced fierce opposition to the decision ever since.

The Bangladesh Insurance Association (BIA), an influential forum representing the owners of private sector insurance firms, has demanded an immediate waiver of the increased fees. Leaders of the association argue that the sudden spike creates an unsustainable financial burden for a sector already facing macroeconomic headwinds. To illustrate the impact, the BIA pointed out that an insurance firm generating 100 crore Taka in gross premium will see its annual renewal costs jump from 10 lakh Taka to 25 lakh Taka.

Conversely, the regulatory body has defended the revised fiscal structure as essential for sector modernization. In its report to the ministry, the IDRA explained that it operates entirely on self-generated funds without direct state budgetary allocations. The authority is currently executing several costly, large-scale projects aimed at revolutionising the domestic market. These initiatives include the digital transformation of compliance systems, the rollout of the National Core Insurance Solution, and the establishment of new specialised training institutes. The regulator maintains that the enhanced fee is crucial to offset rising operational expenditures and establish long-term financial discipline within the industry.