Regulator temporarily suspends Janashakthi Insurance’ biz; Company contests IBSL move, reassures clients

The industry regulator yesterday temporarily suspended the registration of Janashakthi Insurance over non compliance of certain requirements but the Company contested the matter whilst reassuring customers.
The Insurance Board of Sri Lanka (IBSL) said yesterday that it has suspended the registration of Janashakthi Insurance PLC in respect of Long Term Insurance Business and General Insurance Business for a maximum period of three weeks. The move was in terms of section 18 of the Regulation of Insurance Industry Act, No. 43 of 2000.
Accordingly, Janashakthi Insurance PLC is prohibited from issuing new insurance policies in respect of Long Term Insurance Business and General Insurance Business until the suspension is removed and informed in writing to Janashakthi Insurance PLC by the IBSL.
A renewal of an insurance policy in respect of General Insurance Business is considered as a new contract/new insur ance policy, IBSL added.
It said that in terms of Section 18 (2) of the Regulation of Insurance Industry Act, No. 43 of 2000, Janashakthi Insurance PLC is required to fulfill its obligations for insurance policies already issued.
Until the IBSL informs otherwise, the suspension imposed hereby on Janashakthi Insurance PLC remains unchanged till June 2, 2009.
Janashakthi said that it was in the process of appealing against what it described as “sudden and unexpected” imposition of a “very severe penalty.”
It said that the suspension has been imposed due to a non-compliance with the Solvency Ratio, due in turn to the IBSL, not accepting certain specific assets as admissible even though these same assets had been previously accepted as being admissible for solvency since 2006 up to date.
“The Company will continue to honour all claims that may arise during this period and appeals to all Shareholders, Customers and the General Public to continue to have confidence in the Company despite this sudden imposition of a suspension,” Janashakthi said.
It also expressed confidence that the matter will be speedily resolved after further dialogue with the IBSL.
Janashakthi also reiterated that it has, as of date, met all due liabilities, obligations, taxes, direct and indirect and claim payments in a very timely manner and will continue to do so.