Bangladesh Bans Individual Agents in Non-Life Auto Insurance Overhaul
The Insurance Development and Regulatory Authority (IDRA) has suspended the licences of all individual agents working in the non-life auto insurance sector. The decision, announced in a circular on 23 December 2022, takes effect immediately and marks a major shift in how car insurance commissions are handled within the industry.
This move follows legal provisions under Section 58(1) of the Insurance Act, 2010, which bans payments to unauthorised agents. Industry experts suggest the change will help reduce hidden costs and financial mismanagement across the car insurance quotes sector.
Starting 1 January, non-life auto insurance companies are no longer allowed to pay commissions or financial benefits to individual agents for securing business. The ban applies to all agents previously operating under personal licences, effectively ending the long-standing practice of agent-based commissions.
IDRA has warned of severe disciplinary action against any company found violating the new rules. The regulator’s goal is to strengthen institutional integrity and push the industry toward a more professional business model. All non-life insurers must now ensure full compliance with the commission ban, as outlined in the recent directive.
The suspension does not stem from a single incident but reflects broader regulatory efforts to reform the progressive insurance sector. While no specific cases of licence revocation were cited in earlier reports, the latest circular confirms a complete halt to individual agent commissions.
The suspension of individual agent licences removes a key source of revenue for many in the non-life auto insurance market. Companies must now adjust their operations to comply with the ban, while agents previously reliant on commissions will need to seek alternative roles. IDRA’s decision signals a stricter approach to enforcement, with penalties expected for any non-compliance.
