IDRA rolls out policyholder protection measures

For the first time in Bangladesh, the Insurance Development and Regulatory Authority (IDRA) has issued insurance policyholder protection guidelines today to protect the interest of policyholders.

Now, every insurance company must have consumer protection and complaint settlement committees comprising members of their board of directors, according to the guidelines.

The committees will ensure the settlement of complaints related to insurance claims and take effective measures to protect the interests of policyholders, it said.

IDRA has issued the guidelines at a time when payments against claims of around 10 lakh policyholders are hanging in the balance as 29 life insurers are not clearing the dues owing to a liquidity crisis.

The unsettled claims involve Tk 3,050 crore in the four years to the second quarter of 2023, data from IDRA showed.

Currently, there are 35 life insurance and 46 non-life insurance companies in Bangladesh.

As per the guidelines, the insurance plan or product must be approved by IDRA and sales cannot be made without the approval.

At the sales stage, the actual benefits and conditions of the proposed product should be clearly informed to the customer in understandable and simple language, the guidelines said.

No idea or assurance shall be given to the customer, verbally, in writing or otherwise, which is not in the insurance plan, it added.

It also mentioned that the suitable insurance plan or product must be presented to the customer in the context of the customer's needs or demands.

Additionally, no insurance scheme or product shall be forcibly sold to customers.

Customers should also be informed of any restrictions or penalties in case of policy maturity or withdrawal and any investment or other risks associated with insurance policies.

In line with the guidelines, no changes can be made to the insurance contract without the written consent of the insured, the IDRA said.