Insurance Regulatory Commission’s pioneering and path-breaking efforts to “protect the never know circumstances in life” for us all | Daily News

Insurance Regulatory Commission’s pioneering and path-breaking efforts to “protect the never know circumstances in life” for us all

Damayanthi Fernando, Director General, Insurance Regulatory Commission of Sri Lanka
Damayanthi Fernando, Director General, Insurance Regulatory Commission of Sri Lanka

Despite the daunting challenges posed by the Covid 19 pandemic and an unsettled socio-economic climate in the country, Insurance Regulatory Commission of Sri Lanka has circumvented all odds and introduced some far-sighted and far-reaching measures to benefit the public and the insurance industry as a whole.

IRCSL being the regulator of Sri Lanka’s insurance industry, established by the Regulation of Insurance Industry Act, No. 43 of 2000 is responsible to develop, supervise and regulate the insurance industry. In year 2017, the organization changed its name from the Insurance Board of Sri Lanka (IBSL) to the Insurance Regulatory Commission of Sri Lanka (IRCSL).

The object and responsibility of IRCSL is to ensure that insurance business in Sri Lanka is transacted with integrity and in a professional and a prudent manner with a view to safeguarding the interests of policyholders and prospective policyholders. All insurance companies, insurance brokers and loss adjusters as described in the Act and operating in Sri Lanka fall under the regulatory purview of IRCSL.

IRCSL is euphoric at the positive aftermath of its awareness campaigns led by Facebook, YOUTUBE, LinkedIn and scores of other media channels. IRCSL believes that through its significant awareness campaigns, citizens in the country are well informed about Insurance for a Worry Free Life.

“People are now eager to know more about insurance policies that cover any and every facet of life, be it be property, motor vehicle, fire, life, health to list a few and that’s a positive indication that insurance consciousness is picking up and is growing in the country”, said Damayanthi Fernando, Director General of Insurance Regulatory Commission of Sri Lanka.

“Our Market Development and External Relations Division has availed knowledge about policy disclosures, claim procedures and documents and many other valuable and practical know-how for those visiting our social media channels and the IRCSL website.

“We have issued Complaints Handling Guidelines in the year 2016, for Insurance Companies and Insurance Brokering Companies and regularly monitor the progress and effectiveness of the implementation of these guidelines. We use quality questionnaires and reviews to further improve on weak areas of this mechanism,” she said.

The most recent review was carried on this year. “The Complaints Handling Guidelines are issued with the objective of facilitating the policies and processes that are in place for timely and fair handling of complaints including record keeping and taking preventive measures by insurers and brokers and to ensure fair treatment of customers.

IRCSL encourages aggrieved parties to follow a step-by step process to lodge complaints and seek relief, and advises them to lodge complaints with insurance companies as the initial step, details of which are given in IRCSL website. Any unsatisfied customer thereafter can lodge its complaint with IRCSL or with the Insurance Ombudsman for review and decision.

This service is provided free of charge,” she emphasized. IRCSL has also in year 2018 issued Principles on fair treatment of customers in line with the Insurance Core Principles (ICPs) of International Association of Insurance Supervisors (IAIS), in which IRCSL holds membership. IRCSL perceives the fair treatment of customers and protection of their interests as key pre-conditions for the development of the insurance industry.

IRCSL, apart from its supervisory focus on the industry’s financial strength and stability gets heavily involved in facilitating dispute resolution between the insured public and insurance companies over claim matters, playing an independent role. We are also eager to upgrade the regulatory framework on reinsurance, risk based capital standards and the risk based supervisory process to better carryout the duties entrusted to us.

We are also examining to upgrade the primary legal framework, which has been in place for almost two decades in line with applicable ICPs issued by IAIS. However, certain limitations befell upon us to prolong these exercises and we look forward to advancing into the next level of regulation and supervision in the near future.

A line up of group of innovative and value added services introduced by the industry recently are; the issue of dollar insurance policies; the savings insurance plan that provides opportunity of saving and accumulating funds for the future with a life cover for the policyholder to secure the financial future of his or her family and free health-checkups issued by some insurers for long term policy holders.

The evolving needs of the people have changed dramatically giving rise to extraordinary policies like sustainable energy/solar panel policy, cyber risk insurance policy, mobile insurance policy and bicycle insurance policy.

“During the last decade, we have witnessed the segregation of composite insurance companies to separate life and general insurance companies in line with legal requirements, mergers and acquisitions in the insurance industry and now, the industry is settled and focuses on development of the sector and business growth.”

Covid 19 pandemic brought in many challenges as well as opportunities to the sector to leverage on. We see greater potential in the sector with the challenges the country faced during the pandemic and more and more people seeing the importance of risk mitigation by having protection covers. The industry has paid claims amounting to approximately Rs 3,000 million for covid 19 related claims during years 2020 and 2021. Insurance Industry has undergone certain developments recently to enhance smooth functioning of its key operations and the need for robust information technology infrastructures became vital for insurers as companies shifting to remote working environments. Usage of digital and virtual platforms enhanced the effectiveness of functions like, customer servicing, premium collection and claims handling.

Though there was slowdown in the growth of General Insurance Sector in year 2021 mainly due to motor insurance business contracting as a result of limitations on imports, lockdowns etc., year 2022 half year results show an upward trend compared with the half year results of 2021.

Growth rate of general insurance business stood at approximately 17% with a Gross Written Premium of Rs 64,845 million. The life insurance sector has had a peaceful journey of growth during the last few years recording a growth rate of 18% as at mid-year 2022 compared to mid-year 2021 and recording a Gross Written Premium of Rs 66,216 million.

“A plethora of opportunities abound now for insurers to reinvent themselves and provide insurance services fulfilling new social and market needs through the adoption of digital channels in lieu of face-to-face sales.”

“They could look into the acceleration of product development to better align with public demand for protection because the interests of the younger generation is on the rise for life, health, investment and other protection products,” she said in conclusion.


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