Several non-life insurance companies in Bangladesh are allegedly still paying commissions to attract customers, despite a regulatory ban.
Bangladesh has 46 non-life insurance companies. Sources say most of them continue to offer commissions or other financial incentives. Some insurers allegedly lure customers away from companies that have stopped paying commissions.
Industry insiders say the companies that follow the rules are losing existing customers and struggling to win new business. They have called for stronger monitoring and action against violators.
Under a directive of the Insurance Development and Regulatory Authority (Idra), individual agents have been barred from non-life insurance since 1 January 2026. Insurers may not pay agent commissions or other benefits disguised as commissions.
On 23 December 2025, Idra issued a circular suspending individual agent licences in non-life insurance. The authority says the decision protects policyholders, strengthens insurers' finances and safeguards the sector. The circular says violations are offences under Section 58(1) of the Insurance Act 2010.
A private insurer said it lost at least Tk 13 crore in business after it stopped commissions. Rivals allegedly lured away its existing customers with incentives.
Reliance Insurance Managing Director Mohammad Khaled Mamun said his company stopped commission-based business, and some customers moved to rivals offering commissions, particularly in marine insurance. He said the company's business fell by about 10 percent. It typically generates Tk 400-500 crore per quarter. He said it is hard to tell how many customers left, as the company is also losing new business. If firms keep paying commissions, he said, those following the rules will inevitably fall behind in competition.
The managing director of another insurer, who was not named, warned that commission-driven competition could put customers at risk, especially in large claims such as shipwrecks or damaged cargo in marine insurance. The official questioned whether smaller insurers accused of paying commissions can afford large claim settlements, and advised customers to judge insurers by financial strength, claim-settlement record and reliability, not by commissions.
Sadiq Arman, public relations officer of Idra, said inspection teams are visiting insurers and some firms have been fined. Idra is building an integrated IT system to monitor insurers' business in real time. Each policy will get a unique identification number, and no company may issue policies outside the designated platform. Arman said the authority expects the entire process to come under the automated system by December. Idra also plans to link the platform with letter of credit operations, banks and other regulators.
Industry insiders say multinational insurers are generally less involved in commission practices. Local insurers have reportedly lost customers, especially garment, textile and trading companies, to rivals offering commissions.
