SC deals final blow to illegal foreign insurance entities | Sunday Observer

SC deals final blow to illegal foreign insurance entities

3 January, 2021

Unlicensed foreign entities illicitly holding out as insurance brokers cannot ply their trade in this country anymore, with the Supreme Court (SC) 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 JayanthaJayasooriya PC, Justice L. T. B. Dehideniya and Justice 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.

Romesh De Silva PC, Chanaka de Silva PC with SachinthaKahandage and MsSewandiKarralliadde instructed by Paul Ratnayeke Associates, appeared for the respondents.

The ruling signifies the end of a battle in which Strategic Insurance Brokers (SIB), a 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, the applications of the foreign concern failed. MD and CEO of Fairfirst Insurance, SanjeevJha said, “Our legal and compliance team has reviewed the court order closely and taken the necessary steps to comply with the same.”

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 Sri Lanka.

SIB Founding Director Indrajith Fernando said, “We are effectively preventing the fly-by-night foreign entities from holding out as brokers, by the 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.”

“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 said.

“It is clear that the Court judgementrecognises that the law has 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 recognised Brokers’ Association, and be incorporated as a company under the Companies Act of Sri Lanka, he said.