By: Staff Writer
February 17, Colombo (LNW): Strategic Insurance Brokers (SIB) has called on President and Minister of Finance, Anura Kumara Dissanayake, to review the Cabinet’s recent decision on the National Insurance Trust Fund (NITF) tender for reinsurance covering strikes, riots, civil commotion, and terrorism. Their appeal comes in light of legal concerns over the eligibility of foreign brokers operating in Sri Lanka.
A significant legal precedent was set when Colombo District Judge Sandun Vithana issued a permanent injunction barring unregistered foreign entities from offering insurance services in Sri Lanka. This ruling came after SIB sought legal action against JB Boda & Co. of Singapore, which had allegedly been bidding for major insurance tenders without proper registration.
Senior lawyers Romesh de Silva PC and Chanaka de Silva PC, representing SIB, presented evidence showing that JB Boda had unlawfully secured tenders, including those awarded by government institutions like NITF. As a result, an enjoining order was granted against JB Boda, preventing it from acting as a broker in Sri Lanka.
Following this ruling and a Procurement Appeals Board recommendation against the irregular awarding of the contract, the previous Cabinet reversed its decision and reassigned the tender to SIB, which had made the most responsive bid.
JB Boda subsequently appealed to the Civil Appellate High Court, but its case was dismissed, and the Supreme Court declined to grant leave for further appeal. These court rulings effectively blocked foreign entities from misrepresenting themselves as brokers and competing for state contracts.
The case was seen as a landmark judgment in Sri Lanka’s insurance industry. JB Boda had argued in court that it was entitled to function as a broker despite not being registered locally. However, Civil Appellate High Court Judge Sampath B. Abeyakoon ruled against the firm, affirming that foreign companies must comply with Sri Lankan regulations if they wish to operate in the insurance sector.
A similar issue has now arisen with the NITF’s recent awarding of a reinsurance tender. SIB has formally objected to the Cabinet’s decision, raising concerns about legal and procedural violations. They argue that critical information about the eligibility of the awarded company, Tysers Insurance Brokers, was either misrepresented or withheld from decision-makers.
In response, SIB has urged President Dissanayake to:
Instruct the Cabinet to revisit the unlawful awarding of the tender to Tysers.
Revoke the decision made on December 23, 2024, ensuring compliance with Sri Lankan law.
Direct NITF to suspend any contractual agreements with Tysers pending a full review.
SIB warns that allowing an unregistered foreign entity to operate in the insurance sector could undermine local firms and professionals. Industry experts stress that adherence to local regulations is crucial to maintaining public trust and protecting the domestic market.
As this dispute unfolds, attention is now focused on the government’s next move—whether it will uphold legal standards and safeguard the interests of Sri Lanka’s insurance industry.
