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Fraud of LKR 2300 Million – Wijeyadasa

Opposition MP Wijeyadasa Rajapakshe yesterday charged that the much-touted ‘Suraksha Insurance Scheme’ launched for 4.5 million students has defrauded Rs.2,300 million in 2018 and as such it was proper for President Maithripala Sirisena to suspend the insurance scheme.

He lodged a complaint with the Bribery Commission on this matter and told the media that the Education Ministry had paid Rs.2,700 million to the Sri Lanka Insurance Corporation (SLIC) as the premium for 2018 on behalf of 4.5 million students.

“The issue lies here. The full premium paid by the Education Ministry to the SLIC for the year was a huge Rs. 2,700 million. But the value of claims for damages or compensation was only Rs.168 million by May 31 last year. Under no circumstances could the total annual claims exceed Rs.400 million. Therefore, it is quite obvious that paying Rs.2,700 million as premium for insurance for claims less than Rs.400 million is an utter waste of public money,” the MP said.

He said the other question is the alleged reinsurance of the ‘Suraksha Insurance Scheme’ by paying Rs.1,200 million out of the full premium of Rs.2,700 to a foreign re-insurer.

“We tried our best to obtain the information relating to the re-insurance from the SLIC but the top management rejected our requests,” the MP said. “What we cannot understand is that a reinsurance is not obtained for a group, for a large number of employees or for a community because the premium is always much bigger for group insurance than the claims for compensation or damages. But a group insurance is issued on a plane, a high-rise building or on an asset. The 4.5 million students do not come under this category because the number of expected claims for damages is only a small percentage of the total number of students. Our estimate is that the government has incurred a loss of a minimum Rs.2.300 million from the Suraksha Insurance scheme in 2018 alone,” he said.

The MP said the presidential secretary suspended the signing of the insurance agreement with a private insurance company on the instructions of the President.

However, a senior official of the Education Ministry said the suspension of the agreement had led to a situation where the company has to be removed from the scheme, despite it having offered the highest benefits for students and added that the company was selected on a tender and after comparing and assessing the benefits offered by it.

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