President Report for the year 2010 / 2011

It is my pleasure to present the President’s Report to the 22nd Annual General Meeting of the Insurance Association of Sri Lanka (IASL) enumerating the activities carried out during the period April 2010 to March 2011.

The Executive Committee had 13 Committee Meetings during the period under review. Further, the General Insurance Forum (GIF) and the Life Insurance Forum (LIF) had monthly meetings and forwarded their minutes for the consideration of the Executive Committee. The Finance Technical Sub Committee (FTSC) also had meetings, whenever a need arose. In addition, two new sub-committees that were formed in the year under review also met several times. These are the Legal Advisory Forum (LAF) and the IT Sub Committee (ITSC).

The year 2010 saw the insurance industry bounce back strongly to record a 30% growth in Life Insurance and a 12% growth in General Insurance. This can be considered a remarkable recovery considering the growth rates of 0.7% and -3.1% recorded for Life and General Insurance respectively in the year 2009. The improved macroeconomic environment, coupled with timely actions taken by the industry to overcome challenges faced has enabled this excellent performance.

One more insurance company obtained a license from IBSL during the year under review increasing the number of licensed insurance companies from 18 to 19. With the National Insurance Trust Fund (NITF) also being brought under the Regulation of Insurance Industry Act, the number of insurance companies operating under the purview of IBSL has increased to 20. Of these, 18 are members of IASL. It is expected to invite the two new entrants (LOLC Insurance and NITF) also to join IASL in the near future.

The period under review has been a challenging, but fruitful year for the Insurance Industry. I am pleased to report below the activities of the Association during the period.
 

System for reporting of accidents to the Traffic Police

The system developed for the above purpose during the previous year was installed at the Traffic Police Headquarters and it is currently in operation. Member companies are now submitting their records by email in a convenient and standardized form. With the new initiatives being taken by the ITSC, it is expected to capture this data for the compilation of statistics for the benefit of the industry while serving the primary purpose of ensuring compliance with the requirements of the Motor Traffic Act. Once again, I wish to thank Mr. Bonnie Fernando of Ceylinco Insurance PLC for completing this task to our total satisfaction.

Agreement with the Government Medical Officers Association (GMOA) with regard to the completion of medical certificates as a part of claims documentation.

We were able to successfully conclude the negotiations that commenced last year to enter into an agreement with the GMOA satisfactorily resolving this matter. The agreement signed on 21st October 2010 is now effective with all companies using a common set of forms and making payments to doctors for the services rendered as mutually agreed. I wish to thank Mr. Suresh Paranavithane, Chairman – LIF and other members of LIF for driving this process to a satisfactory conclusion.
 

Common Mandate for Standing Orders

On the initiative of the LIF, a request was made to the Sri Lanka Banks Association (SLBA) to facilitate the adoption of a standardized common standing order form to be used by all licensed commercial banks for the purpose of accepting standing order requests for insurance premium payments. Almost all the major banks have accepted this proposal and currently steps are being taken to implement this new process which will benefit banks, insurance companies, insurance agents and customers. The efforts taken by Mr. Reyaz Jeffery of Amana Takaful PLC to coordinate this exercise successfully are recorded with much appreciation.
 

Regulation of Insurance Industry (Amendment) Act No. 3 of 2011

 The above Act containing a number of amendments to the Regulation of Insurance Industry Act No. 43 of 2000 was passed in Parliament in January 2011 and certified in the following month. This Act introduced a number of amendments that are favorable to the industry such as bringing NITF under the provisions of the RII Act, permitting institutional agents to function, etc. However, some amendments on which the industry had expressed strong reservations such as the provision to segregate life and general insurance companies were also retained with an increase in the time given to implement such requirements. IASL lobbied on these issues strongly using a number of channels and the concessions obtained are largely attributable to such efforts.
 

Tax issues faced by Members

As a result of representations made to IBSL and the Ministry of Finance, the issue with regard to VAT on Reinsurance Commissions and Claim recoveries was partially resolved with the Government exempting these items from VAT with effect from 1 April 2011. However, the member companies that have already received assessments are concerned that the Government has not yet taken any steps to exempts past dues despite representations being made to the relevant authorities. This is a matter that will need to be followed up further during the coming year.
 

NAFLIA Congress

The NAFLIA Congress was held on a grand scale for 3rd time on 14 October 2010 at Water’s Edge, Battaramulla.  This event which is held to recognize and develop the top life insurance advisors attached to member companies was conducted this time on the theme ‘Opportunities, Challenges and Realities’. The Congress featured a number of local and international speakers and recorded an attendance of 600 participants.
 

Awareness Programme

This initiative that commenced in the previous year progressed to the next stage with the selection of an advertising agency through a competitive process. Member companies together with the Sri Lanka Insurance Institute (SLII) have confirmed a total sum exceeding Rs. 9 Million to be utilized for this purpose. Much of the creative work has been completed by the Agency under the direction of the NAFLIA Sub Committee. It is planned to break out the campaign in April/May 2011.
 

Website

The website was revamped with a number of additional features under the direction of the IT Sub Committee (ITSC). One important development is that the data base covering information shared by member companies can now be handled through this web site. This is expected to result in a significant cost saving for IASL. The leadership provided in this regard by Mr. Sydney Gajanayake, Chairman of ITSC is highly appreciated.
 

Ombudsman Scheme

The Ombudsman scheme continued to progress well to the satisfaction of the membership. The term of office of the current Ombudsman, Dr. Wickrema Weerasooria has been extended for a further year in recognition of the excellent service rendered by him.
 

Examination Board

The Examination Board consisting of representatives of IASL, SLIBA and SLII met several times to review the conduct of examinations by SLII to certify the technical competence of life and general insurance advisors. The Board was satisfied with the smooth functioning of this process during the period under review.
 

Regular Meetings with SLIBA

The office bearers had several meetings with their counterparts from the Sri Lanka Insurance Brokers association (SLIBA) and discussed matters of mutual interest. Important matters discussed were brought to the notice of the ExCo.
 

Appreciation

Mr, Roy Balasooriya who served as the Secretary General of IASL for last 8 years (since March 2003) retires on 31 March 2011. I wish to take this opportunity to express our sincere gratitude to Mr. Balasooriya for the invaluable service he has rendered to this Association over a long period. I also wish to welcome Mr. Upali Samarasinghe who takes over as Secretary General with effect from 1 April 2011.

I take this opportunity to thank the Chairperson and the staff of the Insurance Board of Sri Lanka for their constant guidance. Further, I wish to convey my appreciation to the Insurance Ombudsman, President and the Council of Sri Lanka Insurance Institute, President and Executive Committee members of the Sri Lanka Insurance Brokers Association and the Chairman, Secretary General and staff of the Ceylon Chamber of Commerce for the cooperation and support extended to IASL during the period under review.

In exclusion, I thank the Vice President, Secretary, Treasurer, Past Presidents, ExCo members, Chairpersons and members of GIF, LIF, FTSC, NAFLIA, ITSC and LAF committees and all others from member companies who have supported me wholeheartedly during my two year tenure as President to achieve the objectives of the association during this period. I wish the new team of office bearers all success!

Manjula de Silva
President
Insurance Association of Sri Lanka