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