Sri Lanka Janashakthi appeals against suspension of insurance licence

May 12, 2009 (LBO) – Janashakthi Insurance said it had appealed against the suspension of its licence by the Insurance Board of Sri Lanka which was due to non-compliance with the solvency ratio as the regulator had not accepted previously accepted assets. . “The company is in the process of appealing against this sudden and unexpected imposition of a very severe penalty,” Janashakthi Insurance said in a stock exchange filing.

“The suspension has been imposed due to a non-compliance with the Solvency Ratio, due in turn to the IBSL not accepting certain specific assets as admissible even though these same assets had been previously accepted as being admissible for solvency since 2006 up to date.”

The statement said the company will continue to honour all claims that may arise during the suspension period.

The Insurance Board said in a statement it suspended Janashakthi Insurance’s licence for three weeks from Tuesday and prohibited it from issuing new insurance policies during the suspension period.

Under the Insurance Industry Act, Janashakthi is “required to fulfil its obligations for insurance policies already issued,” the IBSL statement said.

Janashakthi in its statement appealed to all shareholders, customers and the general pu