Leading insurer grumbles over uneven playing field

A leading insurance provider has expressed disappointment over some insurance companies not following state regulations even two years after such regulations came into force, which has created an uneven playing field for 
the industry.
“Three companies, including a large player in the market, have not complied with the regulation so far, challenging the achievement of regulatory objectives on the development of a stable and healthy industry. Therefore, during 2016 too, all other companies conducted their business activities in an uneven playing field,” HNB Assurance PLC Chairperson Rose Cooray told the shareholders in the firm’s latest 
annual report. According to the Regulation of Insurance Industry Amendment Act, No. 03 of 2011, insurance companies were required to segregate their life and general insurance businesses by January 1, 2015,

and list these entities on the Colombo Stock Exchange by January 
1, 2016.The Insurance Board of Sri Lanka (IBSL) lists two state-owned insurance providers, the Sri Lanka Insurance Corporation Ltd (SLIC) and MBSL Insurance Company Limited, as well as a private company Sanasa Insurance Company Limited as not having segregated or publicly listed their businesses.IBSL Legal and Enforcement Director Ranil Angunawela said that MBSL and Sanasa Insurance are currently in the process of acquiring funds to meet capital adequacies under the new risk-based capital adequacy policy which was introduced in the 2011 amendment, in order to segregate.“For SLIC, there are ongoing discussions regarding segregation, and they have reached up to ministerial level, so I can’t comment on that,” he said. Due to inabilities to maintain high capital adequacies, two mergers have already taken place in the industry, and Cooray said that many more mergers are likely to take place in the coming years, specially in the general 
insurance business.