Sri Lanka Insurance Information

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General Sri Lanka Insurance Information

• Compulsory Insurance:
  
• Non-Admitted Insurance:
  Prohibited, except for import/export cargo and “Free Zone” business.
• Policy Wordings & Rates / Tariffs Controlled:
  Fire, Motor and Workers’ Compensation are subject to tariff rates.
• Policy Language:
  Sinhalses. Tamil and English versions are available upon request.
• Types of Insurance Restricted to Government Institutions:
  
• Policy Currency:
  Sri Lankan rupee (LKR)
• Currency Restrictions / Exchange Controls:
  Premium remittance overseas requires permission – but this is easily granted.
• Policy Period:
  Short term or annual.
• Cancellation Provisions:
  
• Premium Taxes, etc. paid by Insured:
  7.5% on all policies.
• Insurance Companies:
  All insurance companies in Sri Lanka are now private - the former government-owned insurers were privatized in 2000. Foreign insurers may operate in the local market by way of reinsurance and/or share holding.
• Brokers:
  Brokers must establish premium bank accounts.
• Brokerage Commissions:
  
• Broker of Record Letters:
  
• Reinsurance:
  Mandatory cession of 15% of Fire and Marine business is made to the National Insurance Corporation. Afterwards insurers are free to arrange their own reinsurance with the approval of the Controller of Insurance.
• Local Natural Hazards:
  Flood, cyclone, storm.
• Other Information:
  

Property Insurance

• Fire:
  Standard wording includes Lightning. Usual exclusions are: Riot, Malicious Damage, Strike, Earthquake, Spontaneous Combustion. Special Perils coverage is available but Terrorism and Flood must be specifically requested.
• All Risk:
  Long-term construction policies are possible and can be extended to include SRCC.
• Coinsurance:
  
• Blanket Insurance:
  
• Business Interruption:
  UK wordings followed.
• Replacement Cost:
  Available.
• Discount for fire protection equipment / systems: Available.

Boiler & Machinery / Machinery Breakdown / Engineering

• Wordings:
  Machinery Breakdown, Boiler and Pressure Vessel and Lift coverages are written but Business Interruption arising from Machinery Breakdown is not usually available (but negotiable). Machinery Erection insurance is available.

General / Public Liability

• Available Wordings:
  Available including Product Liability. Employer’s Liability can be included.
• Comments:
  

Automobile / Motor

• Compulsory Limits:
  Third Party Liability for Bodily Injury and Property Damage is compulsory – unlimited in amount. Own Damage cover is available. Passenger Liability is available for an additional premium.
• Comments:
  

Workers’ Compensation

• Comments:
  Employers are required to compensate workers for personal injury arising out of their course of employment per the Workmen’s Compensation Ordinance of 1934. The basis of compensation is contained in the Ordinance and is linked to the injured worker’s wages. Insurance is not compulsory – statutory limits are low.

Effective June 1, 1990, the Workmen’s Compensation Amendment Act became effective and put more legal liability on employers: the term workmen now includes all categories of employee; the amount of compensation was increased; the waiting period for temporary disability compensation was reduced to 3 days; the list of occupational injuries increased by 30; and the number of injuries which result of permanent or partial disability increased to 36.

Marine

• Available Wordings:
  Both Cargo and Hull insurance available. The only exports and imports which must be insured locally are tea which is sold in London and Government imports.

Crime

• Available Coverages:
  Theft, Burglary, Fidelity Guarantee, Surety and a wide range of bonds.

Updates & Additional Information: