Knowledge Center


We read our daily newspapers stories about people being involved in road accidents, of aero planes crashing, buildings burning down, theft of goods, peoples being injured at work and many other mishaps.  Behind each story lies a measure of personal tragedy and anxiety for those closely involved.  Yet behind each one is also the vast, sophisticated mechanism of insurance.

From an individual point of view, insurance is an economic device whereby the individual substitutes a small certain cost (the premium) for a large uncertain financial loss (the risk insured against) which would exist if it were not for the insurance contract.  

The primary function of insurance is the creation of the counterpart of risk. Which is security. Insurance does not take away the risk. The insurer does not guarantee that the event insured against will not happen . Whatever good the management and staff, losses do occur. The “Titanic” was unsinkable and yet was lost in the very first voyage. Plants can be operated for many years without accident and then be totally destroyed by Fire.  The house may still burn down, the car may still be involved in an accident but at least a large element of the cost involved will be met by the insurer.


Before the independence 49 insurance companies were functioning most of those were owned by either Pakistanis or by other foreign nationals. After the independence of Bangladesh Government nationalized all the insurance business which were operating in Bangladesh, mostly owned by West Pakistanis and formed the subsidiary corporations one for General Insurance and other for Life insurance business under the controlling corporation the Bangladesh Jatiya Bima Corporation. Later in 1973, Sadharan Bima Corporation was formed for transacting all General Insurance business and Jiban Bima Corporation for Life Insurance business.

To bring efficiency into the sector and to provide quick services with better customer care, Government passed a law in 1984 allowing the formation of Private General Insurance Companies.

Sadharan Bima Corporation was given the monopoly to underwrite the business of public and private sector both. Moreover Re-insurance of Private sector companies were made mandatory with Sadharan Bima Corporation.

The Premium rates in Bangladesh are not yet opened up and are based on Tarrifs prepared by the Central Rating Committee headed by the controller of insurance, Government of People’s Republic Bangladesh. All are bound to follow the Tariffs.


  • THE INSURANCE (AMENDMENT) ORDINANCE, 1984 (Ordinance No. L of 1984)

The Government of the People’s Republic of Bangladesh allowed Private Insurance Companies to operate on 11   August, 1984.


50% Public Sector Business was allowed and distributed to Private Insurance Companies by SBC with effect from 13 February, 1990.
Private Companies were allowed to do 50% reinsurance with SBC and 50% outside SBC with effect from 13th    February, 1990.
Payment of Commission to the Agents prohibited from 13 February  1990.


Payment of Commission to the Agents as per Insurance Act, 1938   reintroduced from 14 March 1993.