Janashakthi re-affirms commitment

Janashakthi Insurance PLC, the first insurer to acquire a state-owned insurance company and swiftly went on to become Sri Lanka's third largest General Insurer within only a decade of operation, announced that it is currently under a sudden and unexpected suspension of its Registration by the Insurance Board of Sri Lanka (IBSL).

Managing Director JI PLC Prakash Schaffter said that as a public quoted company, Janashakthi was totally transparent in its operations and has always fully complied with the regulations of the Colombo Stock Exchange and the IBSL.

"On 12 May 2009 we received an unforeseen directive from the IBSL stating that certain assets we have used to compute solvency margin since year 2006 were not being accepted as admissible assets. As a result the JI PLC license to operate has been temporarily suspended. At this point in time we have appealed to the IBSL to revoke this sudden decision and are confident that it will respond positively to our request", he said.

Schaffter added that during this current period of suspension, Janashakthi Insurance continues to honour all claims that arise. He reiterated that, as at date the Company has met all due liabilities, obligations, taxes, direct and indirect and claim payments in a very timely manner and will continue to do so. He also reassures existing policyholders that they will served with the same level of service that Janashakthi PLC has been providing in the past.

The Insurance Board of Sri Lanka suspended the registration of Janashakthi Insurance PLC in respect of Long Term Insurance Business and General Insurance Business in terms of section 18 of the Regulation of Insurance Industry Act, No. 43 of 2000 for a period of three weeks with effect from 12 noon today (12th May 2009). Accordingly, Janashakthi Insurance PLC is prohibited from issuing new insurance policies in respect of Long Term Insurance Business and General Insurance Business until the suspension is removed and informed in writing to Janashakthi Insurance PLC by the IBSL. A renewal of an insurance policy in respect of General Insurance Business is considered as a new contract/new insurance policy. In terms of Section 18 (2) of the Regulation of Insurance Industry Act, No. 43 of 2000, Janashakthi Insurance PLC is required to fulfil its obligations for insurance policies already issued.

Until the IBSL informs otherwise, the suspension imposed hereby on Janashakthi Insurance PLC remains unchanged till June 2, 2009.