Kathmandu. In a bid to curb anomalies in the insurance sector in Bangladesh, the Insurance Development and Regulatory Authority (IBA) has scrapped the provision related to the appointment of individual agents.
Issuing a new circular related to commission payment, salary and allowances of agents and business development officers, the authority has suspended the license of individual insurance agents in the non-life insurance sector. As a result, there will be no individual insurance agents in the non-life insurance business from January 1, 2026.
The decision was taken on the basis of the recommendation of the Bangladesh Insurance Association, the decision of the meeting with the non-life insurance companies and the proposal to suspend the individual agent license.
The circular states that no non-life insurance company will be allowed to pay commission to an individual agent. This is because no valid personal agent license applies. Also, Section 58(1) of the Insurance Act, 2010 prohibits payment of any commission or remuneration or gratuity to anyone other than the insurance agent.
The new directive has also imposed stricter regulations on the salaries and allowances of insurance development officers. The circular states that the salary, allowances and other facilities of the development officers cannot be determined or paid as a percentage of the insurance premium collected. In the case of all Development Officers except those based on contract service, the salary and allowances should be mentioned in the appointment letter as per the pay scale fixed by the concerned insurance company. The regular salary will also have to be paid accordingly.
In addition to this, the salary, allowances and other facilities of all levels of officers and employees should be paid directly to the officers and employees from the designated bank account for management expenses or through account salary cheque.
Directives have also been issued to submit a quarterly report with detailed information on salaries, allowances and facilities of the Development Officers to the NRA on a regular basis.
These restrictions on agent appointment will not apply to banks operating bancassurance and insurance steak operators.
