Insurance Industry of Bangladesh has a long history of
evolution. About a century back, couple of Insurance companies started both
general and life insurance business during the British regime in India. However,
insurance business got the momentum during the East Pakistan regime, In the
pre-liberation period, there were as may as 49 privately owned insurance
companies underwriting general insurance business along with one central Govt.
run-organization, namely, Pakistan Insurance Corporation. After liberation, the
insurance industry was nationalized vide presidential Order No. 95 of 1972.
By virtue of nationalization order, 5 Corporations were set
up to manage the insurance industry of which four were subsidiary corporation,
two each for life and General and an apex body, viz., Jatiya Bima corporation as
a controlling corporation.
At a later stage, the above five corporations were replaced
by two state owned corporations namely, Sadharan Bima Corporation for general
business and Jiban Bima Corporation for life business under a restructuring plan
made in 1973 in order to curtail excessive administrative expenses of the
Again, in the process of denationalization, the Insurance
Corporations Act was amended in 1984 to allow insurance companies to operate in
the private sector subject to certain restrictions regarding business operating
Subsequent to that, the Act was further amended for the
relaxation of the existing regulation to promote the private sector insurance
companies. Presently, 62 insurance companies are operating in the country, of
which 44 are in general business and the remaining 18 are in life business, even
though the two state-owned corporations, along with couple of private sector
companies, are domination the market.
insurance industry is now at the final stage of transition. It has been decided
to replace the age old insurance laws with Insurance Regulatory Authority (IRA)
Ordinance 2008 and Insurance Ordinance (IO) 2008. The Department of Insurance
will be abolished by the five member Insurance Regulatory Authority headed by
the Chairman not below the rank of Government Secretary. For further enhancing
the solvency position, the paid up capital for general and life insurance
companies have been raised to Tk. 400 million and Tk. 300 million respectively.