Insurance Association of Sri Lanka President and HNB Assurance PLC Chief Executive Officer Lasitha Wimalaratne yesterday said the industry will tighten credit practices in motor insurance, with a phased shift towards a cash-before-cover model from 1 May.
He said the current practice of extending credit of between 30 and 90 days will be reduced as part of efforts to bring greater discipline to the sector.
“We are introducing revised credit guidelines for motor insurance. The current 30 to 90-day credit period will be reduced to 30 days from 1 May and will be phased out over time,” he said.
Wimalaratne noted that in more developed markets, insurance is issued on a cash-before-cover basis, and said the industry is moving to align with such standards.
“In developed markets, it is typically cash before cover. We are moving towards that model as part of strengthening discipline in the industry,” he said.
He added that the move forms part of a broader effort to improve operational standards while advancing digitalisation across the sector.
