The registration of Ceylinco Takaful Limited was suspended last week because the company’s Principal Officer, K. A. S. Jayatissa, has been remanded on a judicial order, says Mrs. Lasinee Serasinghe, Director-General of the Insurance Board of Sri Lanka (IBSL).

"Seven Ceylinco Takaful directors have resigned over the past 10 months", she recalled. "Three directors continue to remain in remand custody".

As the Principal Officer, Jayatissa is also a director of Ceylinco Takaful, a member of the crisis-hit Ceylinco Group. With Ceylinco Consolidated Chairman, Lalith Kotelawala and Deputy Chairman Khavan Perera, he has been remanded in connection with the 26 billion rupee Golden Key scam.

The IBSL moved in to suspend the registration in respect of general insurance business in terms of Section 18 of the Regulation of Insurance Industry Act No. 43 of 2000. The suspension will be in force for a period of three weeks with effect from August 5, 2009.

The suspension prohibits Ceylinco Takaful from issuing new insurance policies in respect of general insurance business. A renewal of an insurance policy is also considered as a new contract/new policy.

The prohibition remains valid until the suspension imposed is removed and the company informed in writing by the IBSL, Mrs. Serasinghe said.

However, in terms of the law, Ceylinco Takaful is required to fulfill its obligations in respect of insurance policies already issued, she explained.

"This means that the company can continue to service these policies", the Director-General noted.