The Insurance Act, 2010 consolidates and amends the law relating to insurance business in Bangladesh, repealing and replacing the Insurance Act, 1938. It applies to all insurers, insurance intermediaries, agents, and brokers operating within the territory. The Act establishes the Insurance Development and Regulatory Authority (IDRA) as the sector regulator. Key mechanisms include the requirement for registration of insurers, the separation of life and general insurance businesses, prescribed minimum capital requirements for insurers, provisions for policyholder protection including a dedicated protection fund, solvency requirements with minimum solvency margins, regulation of investments by insurers to ensure prudent management, and the requirement for actuarial valuation of insurance liabilities. The Act also regulates the conduct of insurance agents and intermediaries, provides for the winding up of insolvent insurers, and establishes the Insurance Appellate Tribunal for dispute resolution. Notable provisions include the prohibition on rebating premiums and the requirement that insurance policies contain clear and understandable terms. The Act is currently in force and is administered by IDRA.
Full text · showing key sections
§ 1Short title and commencement
(1)This Act may be called the Insurance Act, 2010.
(2)It shall come into force immediately.
§ 2Definitions
In this Act, unless there is anything repugnant in the subject or context— (1) "approved auditor" means an auditor approved by the Authority; (2) "Authority" means the Insurance Development and Regulatory Authority; (3) "insurer" means any person carrying on insurance business.
§ 3Application of Act in case of insurer having liabilities
Where an insurer has liabilities in Bangladesh in respect of any class of insurance business, the provisions of this Act shall apply.
§ 4Restrictions on carrying on insurance or re-insurance business
(1)No person shall carry on insurance business in Bangladesh without a certificate of registration under this Act, except for the following companies or societies.
§ 5Classification of insurance business
(1)For the purposes of this Act, insurance business shall be classified as Life Insurance and Non-Life Insurance business.
§ 6Insurance business in rural or social sector
Every insurer shall, after the commencement of this Act, undertake rural or social sector insurance business as prescribed by the Authority.
§ 7Islamic insurance business
(1)Insurers registered under the Insurance Act, 1938 before the commencement of this Act may continue Islamic insurance business in accordance with the provisions of this Act.
§ 8Certificate of registration, etc.
(1)No person shall carry on insurance business under this Act without a certificate of registration from the Authority.
§ 9Grant of certificate of registration
(1)Upon receipt of an application for registration under section 8, the Authority may, after inquiry, grant a certificate of registration.
§ 10Suspension or cancellation of registration
(1)The Authority may, on any of the following grounds, suspend or cancel the registration of an insurer.
§ 11Renewal of certificate of registration
(1)The certificate of registration granted under section 9 shall be renewable annually.
§ 12Notification of change of information submitted with application for registration
(1)If after registration under section 9 any change occurs in the information submitted with the application, the insurer shall notify the Authority.
§ 13Prohibition of carrying on Life Insurance and Non-Life Insurance business by the same insurer
No insurer shall carry on both Life Insurance and Non-Life Insurance business.
§ 14Grant of license for establishment of branch and office of insurer
(1)No insurer shall establish any branch or office without obtaining a license from the Authority.
§ 15Restrictions on name of insurer
(1)Every insurer registered under this Act shall use the words "Life Insurance" or "Non-Life Insurance" as part of its name.
§ 16Adequacy of premium rate for Life Insurance
(1)Every insurer shall ensure that the premium rates for Life Insurance business are adequate.
§ 17Determination of premium rate for Non-Life Insurance
(1)For the purposes of this Act, the Authority shall establish a Central Rating Committee (CRC).
§ 18Provisions regarding collection of premium
(1)Every insurer shall, within 30 days of the commencement of this Act, deposit the premium collected for fire, marine and miscellaneous insurance business in the prescribed manner.
§ 19Provisions regarding insurance abroad
No person shall insure any property or interest in Bangladesh with an insurer not registered in Bangladesh without the permission of the Authority.
§ 20Provisions regarding re-insurance abroad
(1)Subject to the conditions prescribed by regulation, an insurer may cede re-insurance to a registered re-insurer.
§ 21Conditions regarding capital and shareholding
(1)Every insurer carrying on insurance business in Bangladesh shall maintain the prescribed minimum capital.
§ 22Shares of foreign sponsors
Foreign sponsors may hold shares in an insurance company subject to the conditions prescribed by rules.
§ 23Deposit
(1)Every insurer shall deposit with Bangladesh Bank the prescribed amount.
§ 24Maintenance of deposit
The deposit of an insurer shall be maintained in the following manner.
§ 25Return of deposit
When an insurer ceases to carry on any class of insurance business in Bangladesh, the deposit may be returned.
§ 26Separate account and fund
(1)The insurer shall maintain separate accounts and funds for each class of insurance business.
§ 27Balance sheet, accounts, etc.
(1)Every insurer under this Act shall prepare a balance sheet and account of all classes of insurance business transacted in Bangladesh.
§ 28Audit
(1)The balance sheet and account of insurance business shall be audited annually by an approved auditor.
§ 29Special audit
(1)Notwithstanding anything contained in any other provision of this Act, the Authority may order a special audit of an insurer.
§ 30Actuarial report and abstract
(1)Every insurer carrying on Life Insurance business shall, at least once a year, cause an investigation to be made by an actuary.
§ 31Register of policies and claims
Every insurer shall maintain a register of all policies and claims relating to insurance business transacted in Bangladesh.
§ 32Filing of statements
(1)The accounts, balance sheet and actuarial report shall be filed with the Authority within the prescribed period.
§ 33Exemption from certain provisions of the Companies Act
Where not inconsistent with the Companies Act, the provisions of the Companies Act shall apply to insurers.
§ 34Filing of report
Every insurer shall file a certified copy of the report relating to insurance business.
§ 35Summary of proceedings of annual general meeting
Every insurer shall file a summary of the proceedings of the annual general meeting.
§ 36Preservation and inspection of documents and supply of copies
(1)The Authority shall preserve and allow inspection of returns and statements filed with it.
§ 37Power of Authority regarding returns
(1)If it appears to the Authority that any return furnished is defective, it may require amendment.
§ 38Power of Authority to order re-valuation
(1)If it appears to the Authority that any investigation under section 30 is insufficient, it may order a re-valuation.
§ 39Evidence of documents
(1)Every return filed with the Authority shall be deemed to be a return within the meaning of this Act.
§ 40Publication of returns in statutory forms
Every insurer shall publish returns in the prescribed statutory forms.
§ 41Investment of assets
(1)Every insurer shall invest its assets in such manner and at such places as may be prescribed by regulation.
§ 42Subsidiary company
(1)The Authority may permit an insurer to form a subsidiary company for the development of insurance business in Bangladesh.
§ 43Conditions regarding solvency margin
(1)Every insurer shall maintain the prescribed solvency margin.
§ 44Restrictions on loans, advances and financial benefits
(1)No insurer shall grant any loan or advance on the security of its own shares.
§ 45Liability of directors and others for loss
Any loss caused to the insurer or policy holders due to contravention of section 44 shall be recoverable from the directors.
§ 46Manner of maintenance of assets of insurer
The deposit maintained with Bangladesh Bank under section 23 or 119 and assets held with scheduled banks shall be maintained in the prescribed manner.
§ 47Restrictions on appointment of managing agent
No insurer shall appoint a managing agent for the management of its business after the commencement of this Act.
§ 48Investigation of affairs of insurer
(1)The Authority may investigate the affairs of any registered insurer.
§ 49Power of Authority to inspect and call for information, etc.
(1)The Authority may, from time to time, inspect the books, accounts and documents of any insurer.
§ 50Power of Authority to issue directions to insurers
(1)If the Authority is satisfied that an insurer is acting against the public interest, it may issue directions.
The Insurance Act, 2010 consolidates and amends the law relating to insurance business in Bangladesh, repealing and replacing the Insurance Act, 1938. It applies to all insurers, insurance intermediaries, agents, and brokers operating within the territory. The Act establishes the Insurance Development and Regulatory Authority (IDRA) as the sector regulator. Key mechanisms include the requirement for registration of insurers, the separation of life and general insurance businesses, prescribed minimum capital requirements for insurers, provisions for policyholder protection including a dedicated protection fund, solvency requirements with minimum solvency margins, regulation of investments by insurers to ensure prudent management, and the requirement for actuarial valuation of insurance liabilities. The Act also regulates the conduct of insurance agents and intermediaries, provides for the winding up of insolvent insurers, and establishes the Insurance Appellate Tribunal for dispute resolution. Notable provisions include the prohibition on rebating premiums and the requirement that insurance policies contain clear and understandable terms. The Act is currently in force and is administered by IDRA.
