Sanasa Life announces Rs.500mn debenture issue amid regulatory suspension

Sanasa Life Insurance Company PLC has announced plans to raise Rs.500 million through a debenture issue, a strategic move to bolster capital, while the company remains under a regulatory suspension imposed by the Insurance Regulatory Commission of Sri Lanka (IRCSL).

According to a filing with the Colombo Stock Exchange dated January 12, 2026, the board of directors resolved on January 8 to issue up to five million rated, subordinated, unsecured, redeemable debentures, at a par value of Rs.100 each. 

The five-year debt instrument carries a fixed interest rate of 12.50 percent per annum, with interest payments to be made annually.

The timing of the issue is critical, as it follows stern regulatory action taken against the insurer late last year. The IRCSL suspended Sanasa Life’s registration for long-term insurance business on December 5, 2025, citing the company’s failure to meet the required solvency margin and issues regarding the accuracy of data submitted to the regulator. 

While the suspension was initially brief, the regulator extended the ban on new business until January 30, 2026, pending the regularisation of the company’s financial position.

The terms of the proposed debenture issue appear legally structured to address these solvency concerns. The disclosure explicitly includes a “Lock-in Clause”, which restricts the payment of interest or principal, if such outflows would cause the company’s capital adequacy ratio to fall below the minimum threshold stipulated in the Solvency Margin (Risk Based Capital) Rules of 2015. This mechanism ensures that capital remains within the company, to support the policyholder obligations, if the insurer’s financial health is at risk.

Repayment of the principal is scheduled as a bullet payment at maturity, subject to the lock-in provisions. The company stated that in instances where interest payments cannot be made in full, due to these restrictions, the interest would accumulate and be paid on a quarterly basis, once the constraints are lifted. 

The rating for the proposed issue is to be obtained from Lanka Rating Agency Limited. (NF)