Limits the period for vehicle insurance loans

A new decision has been made regarding Sri Lanka's motor insurance sector, and accordingly, steps have been taken to limit the credit period for insurance coverage provided by insurance companies to vehicle owners to 30 days, effective from May 1st. This new regulation has been officially confirmed by the Sri Lanka Insurance Association.

Previously, when insuring vehicles, customers had the opportunity to enjoy an extended credit period of 60 to 90 days. However, with this new amendment, that period will be curtailed, and there is a preparation to completely abolish this insurance credit system in the future, states Mr. Lasitha Wimalaratne, Chairman of the Sri Lanka Insurance Association and CEO of Union Assurance PLC. He revealed this while participating in a recent press conference.

He points out that a key reason for this change is the need to align the local insurance industry with international standards. The Chairman stated that in the markets of more developed countries, insurance coverage is issued based on the collection of relevant funds before providing the coverage, and Sri Lanka is also moving towards that model in the future. He further emphasized that this step has been taken with the aim of further strengthening discipline and raising standards within the insurance industry.