May 12, 2009 (LBO) – Sri Lanka’s Insurance Board said it has suspended Janashakthi Insurance’s licence for three weeks from Tuesday and prohibited it from issuing new insurance policies. The suspension is in respect of Janashakthi’s Long Term Insurance Business and General Insurance Business, the Insurance Board of Sri Lanka (IBSL) said in a statement.
“In terms of Section 18 (2) of the Regulation of Insurance Industry Act, No. 43 of 2000, Janashakthi Insurance is required to fulfill its obligations for insurance policies already issued,” the statement said.
It gave no further details and senior IBSL officials declined comment.
Prakash Schafter, managing director of Janashakthi Insurance, said the company was in talks with the IBSL.
“It is a very unfortunate incident. We are in discussion with the IBSL to revoke the suspension,” said Schafter.
“We will be issuing an official release once the matter is settled.”
Schafter was tight lipped on the reasons why Janashakthi Insurance was suspended by the IBSL.
The Colombo Stock Exchange said it temporarily halted trading in Janashakthi shares to disseminate the announcement of the suspension to the market.