IDRA calls for probe as insurers refuse to provide data alleging corruption

The Insurance Development and Regulatory Authority (IDRA) has requested the government to find out if there were any irregularities when a digital information system was introduced in 2019 to ensure accountability of insurers.

It sent a letter on Saturday to the secretary of the Financial Institutions Division (FID), with a plea for a high-powered probe body, against the backdrop of insurers' reluctance to feed information into the insurance information management system (IIMS).

The non-cooperation of insurers has been justified with allegations of malpractices in the signing of a deal between IDRA and the vendor of IIMS.

The Bangladesh Insurance Association (BIA) has claimed that the agreement was not in line with the existing rules and regulations.

However, sources at IDRA said many insurers would like to avoid IIMS so that they could remain unexposed to the regulatory authority by hiding information about policy holders and their licences.

IDRA proposes making an officer equivalent to additional secretary as the chief of the probe body. "It's necessary to form a high powered investigation committee to identify whether the agreement was signed following the existing rules and regulations or not," reads the letter sent to the FID.

The regulator of insurance companies also said it is important to find out whether any irregularities or corruption took place in the signing of the deal, and if so, legal actions should be taken against those responsible.

Meanwhile, different components of IIMS have been showing results much needed for transparency and accountability in the insurance sector.

For example, Agent License Online (ALO) has uncovered irregularities by agents appointed by insurers to sell policies. More than thirty thousand agents of life insurers had been involved in selling more than 0.24 million policies until May 6 without renewing their licences.

In the case of non-life insurers, 200 agents sold more than 15,000 policies by May 6, despite having their licence expired.

Hence, the government has been deprived of renewal fees.

IDRA data also shows that the issuance of insurance policies without agent codes, provided by the regulatory authority, has been on the rise.

A total of 0.9 million policies were issued by life insurers in the calendar year 2024. Of the policies, the number of policies without agent codes was 0.42 million, more than 42 per cent up from the previous year.

In this situation, IDRA has been unable to get accurate information about a large number of unlicensed agents, which is rendering its job of making 82 insurers, life and non-life, accountable difficult.

With the help of IIMS, policyholders get updates about their premiums through SMS and e-mail notifications. The digital information system is also meant to keep the activities of fake agents in check, according to IDRA.

Moreover, harassment of policy holders is on the decline because of e-KYC (electronic-know your client) service of IIMS, said IDRA, adding that non-compliant insurers had taken a stance against IIMS to protect their own undue interest.

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