92. Ascertainment of profits of insurance companies

Official English translation. The Sinhala text prevails. Open the official Sinhala text, official PDF on documents.gov.lk

(1)

The profits of a company whether mutual or proprietary, from the business of life insurance, shall be the investment income of the Life Insurance Fund, less the management expenses (including commission) attributable to that business:

Provided that where such a company which is not resident in Sri Lanka transacts life insurance business in Sri Lanka, whether directly or through an agent, the profits therefrom shall be ascertained by reference to such proportion of the total investment income of the Life Insurance Fund of the company, as is equal to the proportion which the premiums from life insurance business in Sri Lanka bear to the total life insurance premiums received by the company, subject to a deduction of—

(a)

agency expenses in Sri Lanka (including commission); and

(b)

a fair proportion of the expenses of the head office of the company, due account being taken in each case, by a set-off against such expenses of any income or profits other than life insurance premiums or investment income.

(2)

The profits of a non-resident company whether mutual or proprietary, from the business of insurance (other than life insurance) shall be ascertained by taking the gross premiums from insurance business in Sri Lanka (less any premiums returned to the insured and premiums paid on reinsurance)

and deducting therefrom a reserve from unexpired risks at the percentage adopted by the company in relation to its operations as a whole for such risks at the end of the period for which the profits are being ascertained, and adding thereto a reserve similarly calculated for unexpired risks outstanding at the commencement of such period, and from the net amount so arrived at, deducting the actual losses (less the amount recovered in respect thereof under reinsurance), the agency expenses in Sri Lanka and a fair proportion of the expenses of the head office of the company, due account being taken in each case by set-off against such expenses, of any income or profits other than premiums.

(3)

Where the Commissioner-General is satisfied that by reason of the limited extent of the business transacted in Sri

Lanka by a non-resident insurance company, it would be unreasonable to require the company to furnish the particulars necessary for the application of subsections (1) and (2), he may notwithstanding the provisions of such subsections, permit the profits of the company to be ascertained by reference to such proportion of the total profits and income of the company as is equal to the proportion which its premiums from insurance business in Sri Lanka bears to its total premiums, or on any other basis which appears to him to be equitable in all the circumstances of the case.

(4)

In this section the expression “investment income of the Life Insurance Fund” means ,in the case—

(a)

of a company whose sole business is life insurance, the whole of its income from investment; and

(b)

any other company, such part of its income from investment as is fairly attributable to its life insurance business, other than the amount of any dividend referred to in subsection (5).

(5)

Where a dividend is paid by any resident company to any company carrying on the business of life insurance and that dividend consists of any part of the amount of a dividend received by such resident company from another company, that dividend shall not form part of the investment income of the Life Insurance Fund of the company carrying on the business of life insurance.

I – INTEREST, ETC. PAYABLE TO PERSONS OUTSIDE SRI LANKA

Read on from s 93