News Regulations15 Aug 2024

Sri Lanka:Insurance watchdog announces plans to roll-out reforms as sector stalls

| 15 Aug 2024

The Insurance Regulatory Commission of Sri Lanka (IRCSL) has announced plans to implement reforms aimed at strengthening the stability and resilience of the local insurance industry, as the sector grapples with economic challenges that have stalled its growth.

IRCSL director-general Mrs Damayanthi Fernando highlighted the fall in purchasing power among the public since the COVID-19 pandemic as the topmost challenge affecting the local insurance industry. Other challenges are the limited number of economically active people in Sri Lanka and the uncertainty of interest rates in the local market, reported Daily Mirror.

Speaking at the three-day inaugural Sri Lanka Insurance Summit 2024 that ended yesterday, she said that the IRCSL will implement reforms to shore up the industry’s resilience. Key reforms will include revamping insurance regulations in line with international principles, tightening Risk-Based Capital requirements, and introducing a legal framework for the sale of microinsurance products.

Mrs Fernando added, “We will also issue revised guidelines on reinsurance placements, with tighter roles for consumer protection and emphasizing the brokers’ role in insurance placements that we will be issuing this month.”

The IRSCL will draw up a new legal framework too that will allow companies to test innovative products on digital platforms.

Mr Chandana Aluthgama, group CEO of Sri Lanka Insurance and president of the Insurance Association of Sri Lanka, which was the organiser of the conference, said in his welcome address, “Sri Lanka has weathered significant economic challenges, and while the horizon appears daunting, it is also filled with promise. The recovery process is not merely a goal; it is an opportunity, an opportunity for us to reinvent, innovate, and strengthen the ties among our regional partners, stakeholders, and the wider international community.

He added, “It is our responsibility to ensure that our industry embodies professionalism, transparency, and accessibility. We must leverage best practices, adopt new technologies, and embrace changing consumer needs to create a more vibrant industry that contributes positively to our economy.”

Asia Insurance Review served as a media partner for the inaugural Sri Lanka Insurance Summit 2024.

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