Rs. 50 million solvency margin not met:

Board suspends ABC Insurance

Ravi LADDUWAHETTY

The Insurance Board of Sri Lanka (IBSL) has suspended the registration of ABC Insurance Company Limited in respect of General Insurance Business with effect from April.

The suspension has been imposed from last Friday for contravening section 26 of the Regulation of Insurance Industry Act, No. 43 of 2000.

ABC Insurance Company Ltd has not maintained the minimum solvency margin of Rs. 50 million as required by Solvency Margin (General Insurance) Rules published in Gazette Extraordinary No. 1341/08 of May 17, 2004 as at February 28, 2008.

Accordingly ABC Insurance Co. Limited is prohibited from issuing new insurance policies in respect of General Insurance Business until the suspension is removed, Insurance Board of Sri Lanka’s (IBSL) Legal Director Damayanthi Fernando told Daily News Business yesterday.

Fernando said the ABC Insurance Co. Ltd has been suspended by the Insurance Board of Sri Lanka till April 28 as they have not met the solvency margin requirement of Rs. 50 million which has been required by the Insurance Board of Sri Lanka.

In terms of Section 18 (2) of the Regulation of Insurance Industry Act, No. 43 of 2000, ABC Insurance Company Limited is required to ensure to fulfill its obligations under insurance policies already issued.

Until the Insurance Board of Sri Lanka informs otherwise, the suspension imposed hereby on ABC Insurance Company Limited remains unchanged till 4.30 p.m. of April 28.

IBSL Legal Director Ms Fernando said that the suspension of the Board Decision remained till April 28 until they made the deficit payment which is due by that date and if the payment was not due by that date the suspension will be extended beyond that date.

However, when contacted by Daily News Business, ABC Insurance Co Ltd Managing Director Willie Guneratne said his company had sorted out the matter yesterday.

Responding to a question as to whether he had met the Rs. 50 million deadline as at yesterday, he said that the company had Rs. 40 million as at yesterday.

But when asked whether he had the additional Rs. 10 million needed as at yesterday, he refused to comment.