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Insurance Legislations
IBSL
 

 

Determinations made By the Insurance Board of Sri Lanka

These Determinations are updated as at 26th July 2012

  1. Determination # 1 – 01/03/2011 as amended on –
    1. 20/10/2011 (amendments made to single investment exposure limits in Shares (b), Corporate Debts (c) and Deposits (d) stated in Table A in Determination # 1);

    2. 28/05/2012 (amendments made to the description of asset backed securities for General and Long Term Insurance Business – c(iv) of Table A in Determination # 1); and

    3. 22/06/2012 (amendments made to items (G) and (H) in Determination # 1).
     Click to read more...

  2. Determination 2 – 23/08/2010
    (Determination No. 2 of 30/10/2002 is repealed and replaced by Determination No. 2 of 23/08/2010)
    Section 33 Proviso

    Where an insurer or any such person as is referred to in section 33 of the Act is a shareholder, director or employee of any company registered as a broker under the Act as on the date of registration, such insurer or person shall be required to dispose of such shares, or to relinquish such directorships or employment, as the case may be, either within a period of three months from the date of registration or within such period of time from the date of registration, as may be granted by the Board on a case by case basis.

  3. Determination 3 – 30/10/2002 - Repealed by Section 15 of Act No. 03 of 2011
    Section 35 (b)

    The period for settlement of premia to be set at 60 days from the date on which the premium is
    payable.

  4. Determination 4 – 30/10/2002
    Section 40 (3) (b)

    For the purpose of Section 40 (3) (b) the paid-up value of the policy shall be Rs. 5000/-.

  5. Determination 5 – 30/10/2002
    Section 47 (2)

    Every insurer shall submit a copy of its annual audited accounts to the Board within a period of
    6 months from the close of the financial year.

  6. Determination 6 – 30/10/2002 (Repealed by Determination 15 dated 30/03/2012)
    Section 48 (1)

    Every insurer shall, submit an abstract in terms of Section 48 (1) of the Act to the Board within
    a period of six months after the close of the financial year.

  7. Determination 7 - 30/10/2002
    Section 81 (h)

    An applicant desiring to be registered as a general insurance and/or long-term insurance
    broker shall submit professional indemnity insurance policies for a total value of Rs 1.5 million
    from two or more registered insurers.

  8. Determination 8 – 30/10/2002

    Section 83 (a)
    Section 85 (3) (b)

    The maximum amount of the professional indemnity policy of insurance shall be Rs.5 million for
    the purposes of Sections 83 (a) and 85 (3) (b).

    Determination 8 – 08/02/2008 (With effect from 1st January 2009)

    Section 83 (a) and Section 85 (3) (b)

    (Determination No.8 of 30/10/2002 will be replaced by Determination No.8 of 08/02/2008 with effect from 1st January 2009)

    The maximum limit of the Professional Indemnity Policy of insurance shall be Rs. 10 million for the purposes of Sections 83(a) and 85 (3) (b) of the Regulation of Insurance Industry Act No. 43 of 2000.

  9. Determination 9 – 12/07/2011
    (Determination No. 9 of 01/02/2011 is repealed and replaced by Determination No. 9 of 12/07/2011)

    Section 83 (c) of the Regulation of Insurance Industry Act, No. 43 of 2000 (RII Act) – Renewal of Registration Fee required to be paid by an insurance broker to the Insurance Board of Sri Lanka (IBSL).

    The renewal of registration fee required to be paid by an insurance broker to the IBSL is as follows:


    1. Where the broking commission income of an insurance broker as stated in the Returns submitted to the IBSL under Gazette Extraordinary No. 1642/16 of 25th February 2010, for the four quarters immediately preceding the due date of submission of the renewal of registration application, as stipulated in section 83 of the RII Act is Rs 3 million or less than Rs 3 million, the renewal fee is Rs 30,000/- per class of insurance business

    2. Where the broking commission income of an insurance broker as stated in the Returns submitted to the IBSL under Gazette Extraordinary No. 1642/16 of 25th February 2010, for the four quarters immediately preceding the due date of submission of the renewal of registration application, as stipulated in section 83 of the RII Act is above Rs 3 million, the renewal fee is Rs 50,000/- per class of insurance business


  10. Determination 10 – 30/10/2002 and as amended on 12/07/2011 (Maximum Rate of Commission that may be paid by a broker to an insurance agent)
    Section 88

    For Long Term insurance business:-

    1. The maximum rate of commission that may be paid by an insurer to an insurance agent shall
      not exceed the percentages given below:-

      1. In respect of a non-single premium business- (that is regular premium business):

        POLICY YEAR MAXIMUM COMMISSION PAYABLE
        1
        		30 %
        2
        		20 %
        3
        		15 %
        4
        		10 %
        5
        		5 %
        6 to 10
        		5 %
        11 - 0 %

      2. In respect of single premium business, three per centum of the single premium for policies with term equal to or less than three years, increasing by half a per centum of the single premium for each year by which the policy term exceeds three years, subject to a maximum of six per centum of the single premium.

    2. The maximum commission that may be paid by an insurer to an insurance broker shall not
      exceed the percentages given below:-

      1. In the first year, one hundred and thirty five per centum of the maximum first year commission payable to an insurance agent; and

      2. In the second and subsequent years, the maximum commission payable to an insurance agent as per the table shown above.

    For General Insurance Business:-

    1. No insurer shall pay or contract to pay to an insurance agent and no insurance agent shall
      receive or contract to receive, by way of commission or remuneration in any form on any policy of general insurance and effected through an insurance agent an amount exceeding:

      1. where the policy relates to fire, motor, miscellaneous and other non-marine classes of insurance, 15 per centum of premium payable on the policy;

      2. where the policy relates to marine insurance, 10 per centum of premium payable on the policy.

    2. No insurer shall pay or contract to pay to an insurance broker and no insurance broker shall
      receive or contract to receive, by way of commission or remuneration in any form on any policy of general insurance and effected through the broker an amount exceeding:

      1. where the policy relates to fire, motor, miscellaneous and other non-marine classes of insurance, 20 per centum of premium payable on the policy;

      2. where the policy relates to marine insurance, 15 per centum of premium payable on the policy.

    Maximum Rate of Commission that may be paid by a broker to an insurance agent.

    For Long Term Insurance Business:-
    The maximum rate of commission that may be paid by a broker to an insurance agent shall not exceed the percentages given below:-

    1. In respect of a non-single premium business- (that is regular premium business):

      2. POLICY YEAR MAXIMUM COMMISSION PAYABLE
      1
      		30 %
      2
      		20 %
      3
      		15 %
      4
      		10 %
      5
      		5 %
      6 to 10
      		5 %
      11 - 0 %

    2. In respect of single premium business, three per centum of the single premium for policies with term equal to or less than three years, increasing by half a per centum of the single premium for each year by which the policy term exceeds three years, subject to a maximum of six per centum of the single premium.

    For General Insurance Business:-
    No broker shall pay or contract to pay to an insurance agent and no insurance agent shall receive or contract to receive, by way of commission or remuneration in any form on any policy of general insurance and effected through an insurance agent an amount exceeding:

    1. where the policy relates to fire, motor, miscellaneous and other non-marine classes of insurance, 15 per centum of premium payable on the policy;
    2. where the policy relates to marine insurance, 10 per centum of premium payable on the policy.


  11. Determination 11 - 30/04/2013

    (Determination No. 11 of 30.10.2002 as amended on 25.05.2009 is repealed and replaced as follows by Determination No. 11 of 30.04.2013)
    For the purposes of section 98 of the Regulation of Insurance Industry Act, No. 43 of 2000 the maximum sum assured for long term insurance business is Rs 100,000,000/= (rupees one hundred million) and for general insurance business Rs. 200,000,000,000/= (rupees two hundred billion).

  12. Determination 12 - 31/05/2011 and as amended on 30/04/2013 (Compliance Certifications)

    Section 49 (b) of the Regulation of Insurance Industry Act, No. 43 of 2000 - Quarterly Returns of Insurers

    Every insurer shall, for every quarter commencing from the first day of April 2011, furnish to the Board, its quarterly returns in accordance with the revised Quarterly Returns Formats (revised to be in line with the amendments to the Solvency Margin Rules) enclosed herewith.

    Such Returns are required to be furnished to the Board within forty-five days after the end of each quarter.

    Further, insurers who are required to report on a monthly basis are required to use the revised Quarterly Returns Format enclosed herein from the 01st day of June 2011 and furnish to the Board within such period of time as directed by the Board.

    Compliance Certifications

    Every insurer is required to provide Compliance Certifications to the Board on a quarterly basis, samples of which are enclosed herewith as (A) and (B).

    The Compliance Certifications are required to be furnished to IBSL along with the Insurance Company's quarterly returns.

    Compliance Certification (A) is required to be signed by its Principal Officer (PO) and Chief Financial Officer (CFO) on behalf of the Board of Directors of the Insurance Company. An Insurance Company, where the PO is not the Chief Executive Officer (CEO), Compliance Certification (A) is required to be signed by the PO, CEO and the CFO on behalf of the Board of Directors of the Insurance Company.

    Compliance Certification (B) is required to be signed by its Principal Officer (PO) and Compliance Officer (appointed in terms of section 14 of the Financial Transactions Reporting Act, No. 6 of 2006) on behalf of the Board of Directors of the Insurance Company. An Insurance Company, where the PO is not the Chief Executive Officer (CEO), Compliance Certification (B) is required to be signed by the PO, CEO and the Compliance Officer on behalf of the Board of Directors of the Insurance Company.

    1. Determination 01 (Formats)

    2. Solvency - General Insurance (Formats)

    3. Solvency - Life Insurance (Formats)

    4. Balance Sheet and Profit & Loss Account (Formats)

    5. Compliance Certification (A)

    6. Compliance Certification (B)


  13. Determination 13 – 31/05/2011


    14. Section 33 B (1) of the Regulation of Insurance Industry Act, No. 43 of 2000 – Notice for giving information regarding a person sought to be appointed, elected or nominated as a director of an Insurer

    Every insurer seeking to appoint, elect or nominate a director is required to submit to the Insurance Board of Sri Lanka (IBSL) information requested in the attached notice in terms of section 33 B (1) of the Regulation of Insurance Industry Act No. 43 of 2000, along with the Form required to be filed with the Registrar General of Companies, prior to making of such appointment, nomination or election, as the case may be, and obtain the IBSL’s approval for the same.

    Click here to download the Form and the Affidavit

  14. Determination 14 – 30/03/2012

    Section 47 (1) & 56 of the Regulation of Insurance Industry Act, No. 43 of 2000 – Annual Returns of Insurance Companies

    An insurance company shall, for every financial year commencing from the first day of January 2011, furnish to the Insurance Board of Sri Lanka (IBSL), its annual returns in accordance with the revised formats (revised to be in line with the amendments made to the Solvency Margin Rules) attached herewith.

    Such returns are required to be furnished to IBSL within six months after the closure of the financial year along with statements of holding issued by the Central Bank of Sri Lanka in respect of investments made in Government Securities.

    The first submission shall be made to IBSL on or before 30 th June 2012 for the financial year ended 31 st December 2011.

    Insurance companies are required to disregard previous formats issued by IBSL in this regard.

    1. Determination 01 (Formats)

    2. Solvency - General Insurance (Formats)

    3. Statement Of Recommended Practice

    4. Balance Sheet and Profit & Loss Account (Formats)

    5. Other-Annual-Forms

    6. Unit linked Balance Sheet and Profit & Loss Account (Formats)


  15. Determination 15 – 30/03/2012

    Section 48 (1) of the Regulation of Insurance Industry Act, No. 43 of 2000 – Actuarial Abstract of Insurance Companies

    An insurance company carrying on long term insurance business shall, cause an abstract to be made by an actuary for every financial year commencing from the first day of January 2011, according to the revised formats (revised to be in line with the amendments made to the Solvency Margin Rules) attached herewith and furnish such abstract to the Insurance Board of Sri Lanka (IBSL) within six months after the closure of the financial year.

    The first submission shall be made to IBSL on or before 30th June 2012 for the financial year ended 31 st December 2011.

    Insurance companies are required to disregard previous formats issued by IBSL in this regard.

    Determination 6 of 30th October 2002 is hereby repealed.

    1. Solvency - Life Insurance (Formats)

    2. Actuarial Report and Abstract (Ammended)