June 17, 2007 (LBO) – Sri Lanka’s insurance industry has voiced concern over a recent proposal by regulators to transfer the Strike, Riot, Civil Commotion and Terrorism Fund to the National Insurance Trust Fund. The industry is asking the government to relax the proposal for compulsory ceding of re-insurance premiums, said Marina Tharmaratnam, CEO of Union Assurance.
The compulsory nature of the proposal, she added, disturbs the industry.
The government had proposed that 50 per cent of the insurance fund be ceded to a local re-insurer in the hope of retaining foreign exchange within the country.
The local insurance industry is proposing that the government lower the percentage of the monies ceded to 15 per cent, Tharmaratnam told a recent seminar.
The industry feels that insisting on local re-insurance could be a reversal of policy after recent deregulation and tariff reforms, she said.
It believes that there should be a separate company for this purpose.
This is a very small country and the foreign re-insurers might exit if they see 50 per cent of their market going to a local company, Tharmaratnam said.
So the industry recommends that if you are having a local r