Mohammad Jainul Bari, a Career civil servant joined Insurance Development and Regulatory Authority (IDRA) as its chairman on 16 June, 2022.
Prior to his Joining IDRA, Mr. Bari worked as Secretary, Planning Division, Ministry of Planning and Secretary, Ministry of Social Welfare respectively. He holds B.A (Hons) and Master Degree in English from the University of Dhaka and Master in Public Policy and Management from Northern University Bangladesh. As a Member of BCS (administration) Cadre Mr.Jainul Bari got the opportunity to serve in all significant positions of field administration and secretariat.
Through his civil service Career spanning over 30 years, Mr. Bari was involved informulating and implementing Public Policies, designing, implementing and monitoring development projects and programs.
He was a Director of RajshahiKrishiUnnayan Bank, a Syndicate Member of Haji Mohammad Danesh Science and Technology University, Dinajpur, Rangpur Begum Rokeya University and Dhaka University of Engineering and Technology (DUET). He is a life member of Dhaka University Alumni Association.
Q: As the Chairman of the Insurance Development and Regulatory Authority (IDRA), what are your key priorities for the development and growth of the insurance industry in Bangladesh?
A: Ensuring compliance is critical for the insurance industry to ensure proper treatment to customers. Customer’s satisfaction is vital to the development and growth of the industry. From the very beginning, we are encouraging insurers to comply with the laws which will pave the way for the overall development of the sector in the long run. Apart from these, promotion and awareness building is also our priority.
Q: Bangladesh’s insurance sector has witnessed significant growth in recent years. What measures are being taken by IDRA to ensure the sustainability and stability of the insurance market in the country?
A: Sustainability is very critical for the long-term development of the sector. Taking this into account, multiple steps are being taken by IDRA which include introducing solvency margin, Risk Based Supervision, and segregation of shareholder and policyholders’ funds. Besides that, we are trying to sensitize insurers about the different risk exposurers.
Q: Innovation and technological advancements are transforming the global insurance industry. How is IDRA promoting innovation and digitalization within the insurance sector in Bangladesh?
A: The world economy has entered into a tech era. Fintech and Insurtech have been reshaping the financial sector including insurance. Very recently, we have introduced Regulatory Sandbox for a quantum leap to match the new economy. This is the first of its kind in the country’s financial sector. This ecosystem will enable tech firms and insurers to implement new concepts and products for customers.
Q: Consumer protection is a crucial aspect of the insurance industry. What steps has IDRA taken to enhance consumer awareness, ensure fair practices, and address grievances within the insurance market?
A: We are living in an economic environment in which customer satisfaction is the most important. IDRA believes in fair practice of all the players operating in the market. In this regard, we have a strong grievance redress system to ensure fair treatment to the policyholders. We emphasize on settlement of claims on time. Insurance Act 2010 itself addresses such issues and it has such provision to handle any complaints made by the policyholders.
Q: In recent times, there have been discussions about the introduction of new insurance products and services in Bangladesh. Can you shed light on any upcoming regulatory changes or initiatives to diversify the insurance offerings in the country?
A: We always encourage insurers to bring new products to the market. If we consider the world market major portion of premium income generates from the health insurance sector whereas in Bangladesh only it is below 1%. Hence, we have opened the health insurance for both the life and non-life sector to increase coverage in the health sector. We encourage piloting for product diversifications. We are going to introduce some measures to encourage micro-insurance products, crop insurance and livestock insurance.
Q: Risk management is an integral part of the insurance business. How is IDRA working with insurance companies to strengthen their risk management frameworks and ensure financial stability?
A: IDRA has undertaken Risk Based Supervision approach to mitigate the risk and to ensure financial stability. IDRA is also following the traditional approach to mitigate the risk. Life and non-life sector are different in terms of ways of doing business and mitigating risk. Risk results from the life insurance business mostly relate to investment risk, operational risk, and excess expenses. Whereas, in the non-life sector alleged high commission is a risky practice which affects the solvency position of non-life insurers. Solvency Margin Regulation and Corporate Governance Guidelines are going to be issued soon. We have strengthened off-site and on-site supervision.
Q: Insurance penetration in Bangladesh is relatively low compared to other countries. What strategies or measures are being implemented by IDRA to increase insurance awareness and penetration among the population?
A: Awareness building and penetration rates are correlated. Awareness plays an important role in bringing more people into the insurance sector. IDRA observes National Insurance Day on 1st March each year to mark joining of Father of Nation in the insurance sector.
National Insurance Day act as a catalyst in awareness building across the country as insurers conduct mass awareness program on the eve of this day along with the government.
IDRA also arranges BimaMela in various divisions every year. This event also plays a crucial platform for the insurer and insured to know each other and the different insurance solutions provided by the insurers.
Q: Climate change poses significant risks to the insurance industry globally. How is IDRA addressing climate-related risks and encouraging insurance companies to incorporate sustainable practices?
A: Risk resulting from climate change has been affecting across the country. Agriculture is the most affected area due to climate change threatening the food security and income of marginal people. By now, agriculture is the most disaster-prone area where insurers could play a crucial role in mitigating the risk. We are encouraging insurers to introduce crop insurance products to the areas prone to climate risk.
What is more, storms and cyclones are very common in coastal areas that damage households. We are planning to devise a product to bring them under insurance coverage. The sustainability of such insurance initiatives is important as people living in coastal areas are not financially solvent to pay the premium. In response to this problem, concerned Government department could come up with subsidies in the form of premiums from climate risk funds to generate a pool to the level, which is commercially viable. We are going to implement a pilot project on Weather Index base insurance with the support of the World Bank.
Q. IDRA is planning to open up the Bancassurance channel to increase penetration and reach of insurance products to last mile. When are the regulations expected?
A: Yes of course, Bancassurance could be a game changer in distributing insurance products to more than 80 million bank account holders. This is one of the distribution channels that have been sought most by insurers. Meanwhile, we framed a guideline that has been approved by the Financial Institution Division of the Ministry of Finance. Bangladesh bank will issue a guideline for Banks soon and Bancassurance will be implemented.
Q. Looking ahead, what is your vision for the future of the insurance industry in Bangladesh, and how do you plan to collaborate with industry players to realize this vision?
A: We envision to bring every single citizen under insurance coverage which demands a great deal of planning and commitment from the regulators, insurers, and in some cases from the government. As a regulator, we are ready to provide all kinds of support in the course of this journey to achieve this milestone.
We are sensitizing and encouraging insurers with different tools to align with the mission and act accordingly and it is a continuous process.
