Twenty-six insurance companies, which have less than Tk30 crore paid-up capital, must invest at least 20% of their equity in the capital market if they want to get listed.
In addition, any of the companies will have to raise at least Tk15 crore by offloading shares to the stock market.
The Bangladesh Securities and Exchange Commission (BSEC) has issued the directives recently.
BSEC Executive Director and Spokesman Mohammad Rezaul Karim said recently three insurance firms have received approval where the commission had imposed the conditions.
The directive will be applicable for all insurance firms when they come to the capital market for listing, he added.
Earlier, the securities regulator exempted the insurance companies from the securities rule to enable them to get listed on the stock market under the fixed price method.
Under the new facility, the insurance companies will be able to apply to the commission for IPO aiming to raise less than Tk30 crore.
BSEC took the decision in response to an application by the Insurance Development and Regulatory Authority of Bangladesh (Idra) in this regard.
Previously, Finance Minister AHM Mustafa Kamal said all insurance companies in the country would have to be listed on the stock exchanges by the end of 2019.
He threatened to cancel licences of the companies that failed to comply with the directive.
However, the companies had no option to apply to the commission due to the obligation clause of amended public issue rules.
The Insurance Act requires insurance companies to go public by issuing primary shares, but the number should not exceed two-thirds of what their entrepreneurs hold.
Experts have been saying, for a long time, that Bangladesh is one of the most untapped insurance markets in terms of penetration rate.
Awareness and a strong culture of insurance service behind economic activities can help the industry thrive.
Data by Swiss Re Institute, a leading global reinsurer, shows overall insurance penetration in Bangladesh stood at a meagre 0.57% in 2018 – the lowest among emerging Asian countries.
The penetration rate is measured as the ratio of premium underwritten in a particular year to the GDP.
Insurance penetration was 5.27% in Thailand in 2018, followed by 4.77% in Malaysia, 4.22% in China, 3.70% in India, 2.42% in Vietnam, 1.95% in Indonesia, 1.82% in the Philippines, and 1.15% in Sri Lanka.
Taiwan has the highest penetration rate of 18%.
There are 78 companies in the insurance sector of Bangladesh. Of them, 32 are life insurance and 46 are non-life insurance companies.