For the first time in the history of Bangladesh’s insurance sector, an insurance company has lost its operating licence for failing to comply with the mandatory reinsurance regulation.

The Insurance Development and Regulatory Authority (IDRA) has cancelled the operating licence of Standard Insurance after the insurer failed to satisfactorily explain why it failed to comply with mandatory reinsurance of its three policies worth Tk463 million (US$5.95 million).

The insurer was first placed on a three-month suspension in early June but the suspension was increased by two more months.

On Monday, however, IDRA had withdrawn the licence of Standard Insurance, which means that the company will never be able to do insurance business in Bangladesh.

The non-life insurance company had been listed on the local bourse since 2008.

Sources at IDRA said that the insurance company failed to satisfactorily explain to regulators about its facultative reinsurance.