Unlicensed foreign entities illicitly holding out as insurance Brokers cannot ply their trade in this country anymore, and that is final now with the Supreme Court dealing a death blow to their efforts to continue their alleged corrupt and fraudulent presence in this country. A three member Supreme Court bench headed by Chief Justice Hon. Jayantha Jayasooriya PC, Justice Hon. L. T. B. Dehideniya and Justice Hon. E. A. G. R. Amarasekera dismissed the case filed by JB Boda the appellant Singapore based Company, on the first day their application was heard, December 15. Mr. Romesh De Silva PC, Mr. Chanaka De Silva PC together with Mr. Sachintha Kahandage and Ms Sewandi Karralliadde Attorney at Law instructed by M/s. Paul Ratnayeke Associates, appeared for the respondents in the matter.
This means that the allegedly corrupt Singaporean Company, nor any other foreign entities holding themselves as insurance brokering Companies can do business of any sort — whether insurance or reinsurance — in Sri Lanka.
This includes advisory and documentation related business, or placing bids in State procurements.
The ruling signifies the end of a battle in which Strategic Insurance Brokers (Sib), a premier local brokering Company took on the foreign Brokers first in the District Court for alleged corruption and the Court of Appeal, and finally in the apex Court — in all of which applications the foreign concern failed.
In the meantime the Insurance Industry spirits are soaring this festive season as domestic brokers conclude reinsurance contracts far beyond industry expectations, covering a wider swathe than ever before.
Domestic Insurance Brokers buoyed the Insurance industry in Sri Lanka, by providing and placing major reinsurance contracts and insurance solutions with insurance companies, public interest institutions including Banks — and for mega-infrastructure projects by opting for more transparent and accountable arrangements, as opposed to dealing with questionable contracts offered spuriously by illegitimate foreign entities. With this blitz of new deals, the Domestic Brokers that have the industry and the nation at heart, are winning the confidence of a majority of the insurance companies that have adopted good governance practices.
This is a timely response with the Civil Appellate High Court of Colombo barring outright the activities of nefarious foreign entities in Sri Lanka, in what insurance industry watchers see as a landmark judgment.
“We have been associated with the SIB for over a decade and also been a group company since incorporation and for over 10 years. The company is our sole broker on record and their superior offerings in Sri Lanka are par excellence, comparable to and even better than the overseas brokers. As a transparent Company we have and will conform to all laws and regulations of the country,” Mr. Subash Chandra Pattanayak CEO and MD of LIC Lanka and a professional with enormous insurance experience in the Asian region said.
LIC Lanka is a subsidiary of LIC India, the life insurance company leading by far in that field, in a journey begun over six decades ago.
LIC has been a part of millions of lives every day for the past 61 years. It has been recognized in a process called TRUST, and is an Insurance Company adopting best international governance practices. Fairfirst is also a leading Company adopting best international governance practices. “Our legal and compliance team has reviewed the court order closely and taken the necessary steps to comply with the same” Sanjeev Jha, MD CEO of Fairfirst said. The Supreme Court did not grant leave to proceed and dismissed the appeal, after the Civil Appellate High Court Bench ruled against the foreign broker.
The SC Judgement effectively makes operative the District Court interim injunction issued in 2018, preventing foreign entities from functioning as brokers in the Insurance industry in Sri Lanka. It effectively bars all business concerns or other stakeholders from dealing with entities holding out as a brokers, or engaging in any broking activities in the insurance industry in this country — and consequently prevents the latter from participating in any bids for local tenders and contracts.
“We had placed our trust in Domestic Brokers for reinsurance arrangements, and that has been a win-win, successful arrangement all round in the past years.
The more recent placement of the comprehensive cyber-insurance policy for a leading bank, with others to follow is a good testimony of the capability of Domestic Brokers with special mention of Strategic Insurance Brokers that provided an unparalleled service,” added Fairfirst COO Sanjay Siriwardena. “Domestic brokers have constructively responded and are collectively committed to further developing the Domestic Broking industry with their superior service,” SLIBA leadership sources said. “We have been having a constructive dialogue with the IRCSL (Insurance Regulatory Commission of Sri Lanka) and we acknowledge the support of Razeek Zarook Chairman, Commission members and the team ably led for over 20 years by Director General Damayanthi Fernando,” Broking and Industry sources added.
“Our experience has been extremely rewarding and started on a high note and it is noteworthy to say the Strategic Insurance Brokers’ prospectus of coverage, and in particular the comprehensive Cyber Protection cover for People’s Bank, were by far better solutions than any foreign broker could offer. The competitive reinsurance premiums and lower deductible was the only solution that met the requirements of our clients. This helped the speedy closing of the contract, ” said Deepal Abeysekera, CEO, People’s Insurance.
SIB founding director Indrajith Fernando stated, “we effectively are preventing the flyby-night foreign entities from holding out as brokers with superlative offerings and the extremely competitive solutions we provide.
The national reinsurance contracts including the Combined Retro, and the National Natural Disaster Insurance Scheme have been awarded to SIB in the past several years, being the most responsive bidder and consequently, broker on record, since 2016 to date.”
Sib have gained the confidence of the Insurance industry and the Corporate Sri Lanka and the people at large.
We have offered reinsurance treaties, and facultative arrangements, with a clear track record as being the most responsive bidder despite the international bidding process.
This trust was placed in us by SCAPC in qualifying us for local bids, and being awarded State tenders. This is amidst the alleged attempted corrupt practices by questionable officers in some insurance entities.
They are still lobbying against having to deal with regulated brokers required by law — now a fact confirmed by court decisions.
They are lobbying without any justification and basis to bring back the highly questionable foreign entities, he added. Insurance Veteran Ramal Jasinghe Chairman Sib said of the defendants: “The High Court ruling shows that engaging in reinsurance business illegitimately is no excuse for a foreign broker unregistered in this country from holding out as a broker. This is the best international practice mainly in the developed markets, including Lloyds of London.” Sib based in Sri Lanka is empowered by Uniba Partners, the client-centered global brokering network present in 140 counties, with over 4,000 insurance professionals The company is a global leader in Insurance and Reinsurance broking and Risk Management.
With operations spanning over several decades, Sib which was founded by a leading conglomerate with over a century and a score of success, has diverse experience operating as an
Insurance Regulatory Commission of Sri Lanka (IRCSL) registered Composite Insurance and Reinsurance broker in Sri Lanka. Industry sources meanwhile applauded the High Court judgement, in the context of an unambiguous policy and regulatory framework that was affirmed by the Supreme Court — with the denial of leave to proceed and dismissing the foreign broker’s application to Appeal.
“It is clear that the Court judgement recognizes that the law provides no loopholes,” an Insurance Regulatory Authority of Sri Lanka spokesperson said, adding “The Judgement gives us the moral authority to act swiftly to apprehend nefarious and illegal foreign brokers.’
The judgment effectively confirms that every person who acts as a broker for reinsurance, should register with the IRCSL under terms of the Act, be a member of a recognized Brokers Association, and be incorporated as a company under the Companies Act of Sri Lanka.
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