Financial Times

Liabilities of SLIC

When plans were underway for the privatization of the Sri Lanka Insurance Corporation, 95% of the employees were opposed to it and often with very good reasons.

For one thing, the SLIC has always been a cash cow for the government and during the last five years of its existence as a corporation and it was fortunate to have truly professionals as chairmen.

They succeeded in minimizing political interference and with the wide support of employees, trade unions and the agents it was possible to make SLIC compete strongly with the private sector.

Actually the market position stabilized and was improving when the then government decided to privatize SLIC disregarding fierce opposition from staff and agents.

The main fear of employees and agents was that the new owners would try their best to disclaim liabilities on large insurance contracts on some pretext or the other thereby damaging a reputation built up with great difficulty.

These fears have come right. The present owners of SLIC have refused to pay under a guarantee claim stating that those who signed it are no longer in service, they were exceeding authority and that it happened before privatization. None of these is correct.

The document in question has been signed by an officer who during our times was a signatory to most important documents and always represented SLIC at any major forum.

Though he is no longer in service his signature remains valid for all contracts entered into during his period of service.

If the new management is going to disclaim liability it is illegal, as they have taken over both assets and liabilities of the SLIC and public will lose faith in this institution. Everyone including former employees, policy holders and future customers are watching the performance of the new owners very keenly.

It is only a matter of time when the new owners will start looking for the slightest opportunity to disclaim liability on all large contracts as and when they come up to be honoured.

Jehan Samarasekera
Ragama

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