Insurance firms on CSE

New amendments pertaining to enhancing insurance companies’ capital enhancement is to become law by next year, according to Insurance Board of Sri Lanka (IBSL) sources. “The issued share capital of firms are requested to be enhanced upto Rs. 250 million by 2008 December, upto Rs. 500 million by 2009 December and Rs. 1 billion by 2012 December,” an IBSL source told The Sunday Times FT.

This is in a bid to make insurance firms stronger in terms of their capital. Following this, as a facilitating mechanism for the firms to bring in capital, the firms are looking at getting listed in the Colombo Stock Exchange (CSE).

“The IBSL is promoting listing in the CSE, because the insurance companies are requested to enhance their issued share capital by those particular amounts on the given dates. As such they need to bring in fixed funds on top of the issued share capital they have. Bringing in fixed funds is costlier than listing in the CSE,” the source explained.

The IBSL is also concerned about the transparency of insurance firms. “As it is, the public doesn’t get any information to make them transparent. This was a concern to the IBSL,” the source noted.