IRCSL extends Sanasa Life Insurance suspension to March 3

By Nishel Fernando

The Insurance Regulatory Commission of Sri Lanka (IRCSL) has once again extended the suspension of the registration granted to Sanasa Life Insurance Company PLC to carry on long-term insurance business.

In a filing to the Colombo Stock Exchange (CSE) yesterday, the insurer stated that the suspension, which was set to expire on January 31, 2026, has now been extended until March 3, 2026.

The regulatory body communicated this decision via a letter dated January 30, 2026, invoking Section 18 (5) (b) and (c) of the Regulation of Insurance Industry (RII) Act, No. 43 of 2000.

Sanasa Life Insurance was initially suspended on December 5, 2025, for failing to meet the required solvency margin, providing misleading data to the regulator, and conducting business in a manner deemed detrimental to the interests of policyholders. The suspension was previously extended from late December to the end of January.

During this period, the insurer is prohibited from issuing new life insurance policies but remains obligated to service existing policyholders and meet all liabilities arising from policies already underwritten.

In a related development, Lanka Rating Agency (LRA) downgraded the instrument rating of the company’s Rs. 200 million Senior Unsecured Redeemable Debentures earlier this year. The agency assigned a “Negative Outlook” to the instrument and downgraded the company’s Insurance Financial Strength (IFS) rating to ‘BB (ifs)’, signalling heightened risks associated with the insurer’s credit profile amidst the ongoing regulatory hurdles.

The company remains on theCSE’s “Watch List” pending resolution of these regulatory and solvency issues.