The Insurance Association Sri Lanka (IASL) has made fresh representations to the Insurance Board of Sri Lanka (IBSL) and the National Insurance Trust Fund (NIFT) pertaining to unfair practices which have disrupted the level playing field in the industry,according to officials.
“We made these representations two months ago for the second time as the top officials in both IBSL and NITF changed (from the first time we made representations),” Manjula de Silva, President IASL told the Business Times.
He said that both these parties gave a hearing to the issues. The IASL has raised concerns with the IBSL regarding the entry of NIFT into commercial insurance and over a government circular issued last September now used by state sector insurance instituions to create a monopolist situation in the local market. The industry players say that NIFT was not meant for such a purpose and also the fact that it has been exempted from the Insurance Act raises serious issues on how NIFT is governed. “All of us are governed by this Act. Exempting NIFT from this regulation when its competitors are governed by this Act creates a stark imbalance in the market,” an industry source pointed out.
The public finance circular number PF/437 titled ‘provision of general insurance cover for government institutions’ instructs all government and semi government institutions to obtain their general insurance cover, only from the NIFT or the SLIC. The circular is very comprehensive and covers state sector insurance, marine, fire, motor, general accident, insurance of property belonging to government and semi government sectors and acquired property.