IBSL gets tough on errant brokers

Indunil Hewage

The Insurance Board of Sri Lanka (IBSL) has decided to take stern action against errant insurance brokers if they do not submit insurance premium collected from policyholders to the relevant insurance companies within two weeks. A senior IBSL official said a special supervision team of IBSL is conducting investigations to make certain that this process is done accurately.

It is reported that many insurance brokers are reluctant to submit insurance premium to relevant insurance companies within two weeks due to various reasons. IBSL has also sent warning letters to them requesting to adhere to the section 89 of the Regulation of Insurance Industry Act No 43 of 2000 which instructs that a broker is committed to submit collected premium to insurers within two weeks of collection. In keeping with new actions taken by IBSL all insurance companies will have to instruct its auditors to present its audit reports adhering to important provisions in the regulation of Insurance Industry Act by Insurers.

The reporting will commence from financial year 2010.

This will help to indicate a true and fair view of the financial position of the insurer while widening the scope of the audit and the insurer will have to be more responsible to the regulator.

All insurance agents have to act in a transparent and professional manner in order to grow the Insurance business and they would have to deal with the IBSL rules seriously if they violate the rights of policyholders.