Sanasa Life Insurance suspended over solvency and data integrity violations

By Nishel Fernando

The Insurance Regulatory Commission of Sri Lanka (IRCSL) has suspended the registration of Sanasa Life Insurance Company PLC, effectively halting its ability to carry out long-term insurance business for a period of three weeks. 

The suspension, which took effect on December 5, 2025 and will remain in force until December 26, 2025, was issued under the provisions of Regulation of Insurance Industry Act No. 43 of 2000.

The regulatory body cited severe infractions as the basis for the suspension, accusing the insurer of conducting business in a manner detrimental to the interests of the policyholders and national interest.

In a disclosure to the Colombo Stock Exchange, the company admitted that the regulator found it unable to meet the specified solvency margin, a critical financial metric required to ensure an insurer can pay out the future claims. 

Furthermore, the IRCSL stated that the company failed to follow the legal provisions and regulatory orders and accused it of providing false, inaccurate and misleading data while concealing the material facts.

This regulatory action stands in sharp contrast to the optimistic image projected in the company’s recent financial reporting. Just weeks prior to the suspension, Sanasa Life released its condensed consolidated interim financial statements for the period ended September 30, 2025, under the title ‘The Unshaken Light’. While these unaudited statements reported a profit for the period, they also revealed a retained earnings deficit of Rs.59 million for the group, hinting at an underlying financial strain, despite the positive branding.

The suspension also challenges the narrative of stability presented in the company’s 2024 annual report titled ‘Beacon of Resilience’. In that report, Sanasa Life claimed a capital adequacy ratio (CAR) of 169 percent for its life insurance business, well above the regulatory minimum and positioned itself as an “unwavering” protector for its 560,000 customers. The regulator’s recent findings regarding insolvency and data manipulation now cast doubt on the accuracy of those prior assertions of financial health. Sanasa Life Insurance, which was established in 1991 and operates through a network of 191 branches, has long marketed itself as a leader in microinsurance, aimed at uplifting the grassroots communities. 

The suspension notice was formally communicated to the exchange by CEO Nuwanpriya Gunawardena, who acknowledged the regulator’s directive. As the suspension period progresses, the company faces the critical task of addressing these solvency and compliance failures to regain its licence to operate.