The insurance regulator has placed 32 companies in "high-risk" category, just days after finalising a draft ordinance that would allow for the restructuring, merger and change in ownership, or even liquidation of troubled insurers.

The Insurance Development and Regulatory Authority (Idra) placed these firms in the category, citing their poor governance and fragile finances.

At a press conference at Idra's headquarters yesterday, Idra Chairman M Aslam Alam announced the classification, though he did not disclose the names of the companies or provide a detailed breakdown of the risks.

He said 15 of the high-risk firms are life insurers, while the remaining 17 operate in the non-life segment.

Of the companies labelled as "high-risk", 15 are in an "unviable" state, while issues facing the "medium-risk" group are seen as "solvable".

However, Alam did not share a similar risk assessment for the non-life firms.

"We have an internal grading system based on specific criteria, on which this classification is based," said the Idra chairman.

The regulator has recently finalised the Insurance Resolution Ordinance 2025, which would give Idra sweeping powers to declare insolvent insurers bankrupt.

Industry insiders say this signals the regulator's own recognition of the sector's deepening vulnerabilities.

At the press briefing, Alam admitted the insurance industry is facing a crisis.

"The failure to settle claims on time has eroded public trust in the industry. Without transparency and accountability, confidence will not return."

He also acknowledged that Idra itself shares some of the blame for the current fragile credibility.

He revealed that around 45 percent of the claims in the life insurance segment and 47 percent in the non-life segment remained unsettled at the end of 2024.

As of December 2024, some 13 lakh life insurance policyholders had pending claims worth Tk 4,414 crore, he said.

Over the past 14 years, the sector has seen 54 lakh policies lapse.

Currently, there are 71 lakh active policies, the Idra chairman said.

Alam noted that in 2024 alone, Idra received 24,852 complaints. However, due to a shortage of manpower, many of these could not be properly addressed.

To help rebuild public trust, proposals have been made to amend several laws and regulations governing the insurance sector, he said.

The insurance regulator has placed 32 companies in "high-risk" category, just days after finalising a draft ordinance that would allow for the restructuring, merger and change in ownership, or even liquidation of troubled insurers.

The Insurance Development and Regulatory Authority (Idra) placed these firms in the category, citing their poor governance and fragile finances.

At a press conference at Idra's headquarters yesterday, Idra Chairman M Aslam Alam announced the classification, though he did not disclose the names of the companies or provide a detailed breakdown of the risks.

He said 15 of the high-risk firms are life insurers, while the remaining 17 operate in the non-life segment.

Of the companies labelled as "high-risk", 15 are in an "unviable" state, while issues facing the "medium-risk" group are seen as "solvable".

However, Alam did not share a similar risk assessment for the non-life firms.

"We have an internal grading system based on specific criteria, on which this classification is based," said the Idra chairman.

The regulator has recently finalised the Insurance Resolution Ordinance 2025, which would give Idra sweeping powers to declare insolvent insurers bankrupt.

Industry insiders say this signals the regulator's own recognition of the sector's deepening vulnerabilities.

At the press briefing, Alam admitted the insurance industry is facing a crisis.

"The failure to settle claims on time has eroded public trust in the industry. Without transparency and accountability, confidence will not return."

He also acknowledged that Idra itself shares some of the blame for the current fragile credibility.

He revealed that around 45 percent of the claims in the life insurance segment and 47 percent in the non-life segment remained unsettled at the end of 2024.

As of December 2024, some 13 lakh life insurance policyholders had pending claims worth Tk 4,414 crore, he said.

Over the past 14 years, the sector has seen 54 lakh policies lapse.

Currently, there are 71 lakh active policies, the Idra chairman said.

Alam noted that in 2024 alone, Idra received 24,852 complaints. However, due to a shortage of manpower, many of these could not be properly addressed.

To help rebuild public trust, proposals have been made to amend several laws and regulations governing the insurance sector, he said.