- Two companies selected to provide reinsurance support to NITF for 18 months
Cabinet has green-lighted a Rs. 1 billion reinsurance cover for the National Insurance Trust Fund (NITF) for 18 months from two Indian and Nepalese companies.
The NITF is mandated to underwrite 30% of the reinsurance coverage for Sri Lanka.
It in turn obtains retrocession from re-insurance companies to reduce risk. Following a tender process, two companies have been selected for the NITF to obtain coverage from: J.B. Boda and Co. headquartered in Mumbai and Everest Reinsurance Company based in Nepal. The value of this retrocession is Rs. 985.5 million and the proposal was submitted by Prime Minister Mahinda Rajapaksa in his capacity as Finance, Economic and Policy Development Minister.
A second Cabinet memorandum was submitted and also received approval for the NITF to furnish reinsurance for strikes, riots, public unrest, and terrorist activities for the general insurance companies operating in Sri Lanka. The amount of Rs. 116.39 million was also obtained by J.S. Boda and Co. Ltd. with the Chief Insurer being Chaucer Syndicate 1084, which is listed on the London Stock Exchange.
Both bids were recommended by the Standing Procurement Committee appointed by the Cabinet of Ministers, the Government Information Department said in a short statement.
The Cabinet annually approves these reinsurance and retrocession measures for the NITF.