July 31, 2008 (LBO) – The Insurance Board of Sri Lanka has revealed it had warned several insurance firms that violated regulations and also resorted to advertising campaigns that misled the public. The Board said it issued warnings to two insurers, one violating rules on investments in government securities; and the other for having granted loans to related companies without obtaining the regulator’s concurrence.
“These companies were cautioned that further violations of the (rules) could result in legal action being contemplated against (them) and the license being suspended (or) cancelled,” the board said in its annual report for 2007 released recently.
The Insurance Board also issued directions to an insurer to stop one of its advertising campaigns which contained “incorrect and misleading” information and material.
“The company was further advised to refrain from such advertising in the future and also informed that their failure to comply would compel the Board to consider initiating action against them,” the report said.
Under local rules, insurance firms are required to submit ‘compliance certification’ to the regulator Board whenever they issue new advertisements to the m