The Financial Institutions Division in Bangladesh is proposing to remove a provision mandating non-life insurers to cede half of their reinsurance business to state-owned Sadharan Bima Corporation due to low claim settlement ratios. IDRA data shows only a 35.54% claim settlement ratio in the sector as of December 2023, prompting the proposed amendment to the Insurance Corporation Act 2019 to address inefficiencies in claim settlements. SBC staff have protested against the suggestion, expressing concerns about the corporation’s future. IDRA representatives believe the changes could improve claim settlement rates and attract foreign capital into Bangladesh. Audited figures up to December 2024 show SBC owes Tk14bn to insurers, while insurers owe Tk9.28bn in unpaid premiums to SBC. Ending mandatory reinsurance with SBC could strengthen private reinsurers and allow foreign reinsurers into Bangladesh’s market.

Read more at Yahoo Finance: Bangladesh considers ending mandatory reinsurance with SBC