ECONOMYNEXT – Sri Lanka’s insurance coverage regulator was blocked from implementing a key regulation by commerce unions of state-run Sri Lanka Insurance coverage Company for nearly a decade with political backing, in keeping with revelations made at a parliamentary panel.
The Insurance coverage Board of Sri Lanka had issued regulation asking insurers to separate their life and normal companies in 2011 which needed to be accomplished by 2015.
However for nearly a decade the separation of SLIC and MBSL had not been achieved, whereas different insurers complied.
“There have been fixed union agitation towards segregation, that was one of many predominant causes for them to delay as effectively,” Insurance coverage Regulatory Fee of Sri Lanka Director Common Damayanthi Fernando informed the Parliament’s Committee on Public Finance.
COPF Chairman Harsha de Silva stated it was not appropriate for laws to be selectively carried out.
“You’re the regulator,” de Silva stated. “Parliament has given you the authority to uphold the regulation.”
Deputy Minister of Finance and Planning Harshana Suriyapperuma, questioned whether or not political stress had been introduced on the IBSL.
“A former secretary to the president issued a letter to the unions saying there was no want for segregation,” Fernando stated. “They nonetheless have that letter and not too long ago got here and confirmed saying to amalgamate once more.”
De Silva stated some authorities officers had gone past their powers. “That letter ought to be withdrawn.”
De Silva questioned what penalty had been imposed on SLIC for not segregating the enterprise.
“Why are highly effective gamers allowed to govern markets whereas smaller corporations face strict enforcement? Selective regulation is unacceptable in a good economic system,” de Silva stated.
De Silva additionally questioned why MBSL Insurance coverage, one other firm whose life and normal insurance coverage enterprise was additionally not segregated.
The agency had a capital deficiency and required contemporary funding, Fernando stated. The segregation had been delayed till a capital was injected.
Within the meantime the agency was ordered to not write new enterprise. The corporate ceased writing new companies in 2020.
Deputy Minister Harshana Suriyapperuma questioned whether or not there had been investor curiosity, and what was holding up the matter.
COPE requested that the matter be expedited. (Colombo/Mar10/2025)
