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(Reproduced from the Daily News of December 20, 2001) South Asian insurance regulators gathered in Colombo yesterday to promote and ensure the development and maintenance of a well-regulated and dynamic insurance sector in the region at the first South Asian Insurance Regulators' Forum organised by the Insurance Board of Sri Lanka at the Taj Samudra Hotel. Insurance regulators from Bhutan, India, Nepal and the Maldives were present. Director General of
the Insurance Board of Sri Lanka, Dr. Dayanath Jayasuriya said the
inaugural meeting would lay the foundation stone for an important
initiative in insurance regulations among South Asian regulators. The primary objective of the Forum is to promote cooperation among South Asian Insurance Regulators to facilitate regulatory activities; the sharing of information and experiences; the training of regulatory staff and the harmonisation of legislative approaches and financial reporting systems to the extent feasible, Dr.Jayasuriya said. The proposal to
create a South Asian Insurance Regulators' Forum was mooted by Dr.
Jayasuriya at the Annual Conference of the International Association of
Insurance Supervisors in Bonn a few months ago. "The conference in Bonn a few days after the events in New York was overshadowed by news of the exponential increase in liability for the risks that had been covered. The message of the representatives of re-insurance companies was on the price that had to be paid if risks are to be re-insured where the premium will be much higher unless systems are put in place for minimising risks and for damage control," he said. "The
discussions in Bonn focused on new challenges for regulators. Money
laundering poses many problems with the imminent release of the single
currency-euro and with the disappearance of the currency notes of the
countries concerned, there were concerns that attempts will be made to use
the insurance industry to conceal cash thus unaccounted for. This has
implications for screening prospective long-term insurance policy-holders.
The use of the internet to provide cover from insurers operating from
other jurisdictions not subject to regulatory controls poses problems.
Countries are more likely to see mergers and cross-border operations bring
in new concerns, Dr. Jayasuriya said. The South Asian
insurance industry cannot remain oblivious to current and emerging issues
of global concern. We need to develop approaches and solutions best suited
to the reality that exists in the region,'' Dr. Jayasuriya said. Chairman of the Insurance Board of Sri Lanka, Ken Balendra said the Forum can be instrumental in assisting countries in the region to consider the feasibility of setting up funds such as the Riot, Civil Commotion, War and Terrorism Fund set up by the Government some years ago and also the formation of a region-specific reinsurance company specially designed to cater to the war and terrorism-related risks in countries of the region. Making the keynote address at the Forum, IMF's Resident Representative in Sri Lanka, Dr. Nadeem Ul Haque said the regulators need to focus more on market development and innovation. Markets wither under regulation, he said. It is essential to promote and protect fair competition. Dr. Haque called upon the participants to build regulation with care bearing in mind the cost of regulation.
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