CORPORATE GOVERNANCE
Corporate governance ensures that Ceylinco Life upholds the highest standards of accountability, transparency, and ethical decision-making, while integrating principles of responsible stewardship across its business operations. By establishing clear roles, responsibilities, and processes, the Company’s robust corporate governance mechanisms foster trust with key stakeholder groups, enhance the Company’s long-term sustainability and reputation, and ensure compliance with legal and regulatory standards.
UNDERSTANDING CLIC’S APPROACH TO CORPORATE GOVERNANCE
KEY CHALLENGES:
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Insurance Confidence' level in Sri Lanka stands at a concerning average, with many citizens expressing skepticism or uncertainty about the industry. This directly translates to the country's low insurance penetration rate of 1.1%.
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Simplifying the Insurance Experience,Simplifying Customer Interactions,Investing in Public Education and Awareness, are few areas the regulator had deviced new compliances.
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CLI has to adopt quickly to these ever changing regulatory/compliance landscape.
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In this endeavour governnance plays a key role in the organzaition to protect and comply with the regulatory risks.
CORPORATE GOVERNANCE
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Strong governance framework ensuring compliance with IRCSL regulations and corporate governance codes.
Independent Board oversight with audit governance and risk committees enhancing accountability.
Adherence to SLFRS 17 SLFRS/LKAS and strong financial reporting standards.
Ethical governance practices with a focus on transparency and risk management.
ESG integration promoting responsible corporate governance.
Established internal controls and regulatory compliance mechanisms.
STRENGTHS
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Challenges in fully adapting to SLFRS 17 and SLFRS 09.
Ethical and ESG Implementation Gaps.
Cybersecurity governance gaps as digitalisation expands.
Room for further educating the employees on latest regulatory developments i.e. Personal Data protection, Anti Coruption etc...
WEAKNESSES
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Strengthening ESG and sustainable governance frameworks to enhance corporate reputation and attract investors.
Improving transparency and reporting through enhanced governance disclosures.
Implementing AI-driven governance tools for compliance, fraud detection, and risk management.
Enhancing cybersecurity and digital governance to mitigate IT and data risks.
OPPORTUNITIES
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Regulatory and compliance risks due to evolving IRCSL policies and governance standards.
Reputational risks from governance lapses, ethical concerns, or compliance failures.
Economic and political instability affecting governance decisions and business sustainability.
Increasing stakeholder expectations for greater corporate responsibility and transparency.
Cybersecurity risks and data governance challenges in the digital era
THREATS
CHAIRMAN’S MESSAGE ON CORPORATE GOVERNANCE
It is with great pleasure and responsibility that I present to you the Chairman’s Report on Corporate Governance. This year marked a pivotal chapter in our journey, where we intensified our focus on corporate governance, strengthened our Environmental, Social, and Governance (ESG) framework and maintained unwavering compliance with regulatory expectations, particularly those outlined in Section 9 of the Colombo Stock Exchange (CSE) Listing Rules on Corporate Governance as mandated by Direction 02 of 2022 (Revised) issued by the Insurance Regulatory Commission of Sri Lanka. These efforts underpin our commitment to long-term sustainability and stakeholder value creation.
Strengthening Corporate Governance
Corporate governance remains the cornerstone of our operations, enabling us to navigate a dynamic business environment with resilience and accountability...
Key Initiatives and Achievements in Governance During the Year
Board Composition and Leadership
- Diverse and independent leadership: Our Board comprises a balanced mix of Independent Directors, industry experts, and seasoned executives, ensuring diverse perspectives and robust decision-making.
- Focused subcommittees: Active subcommittees, including Audit, Risk Management, Nominations and Governance, Remuneration, Related Party Transactions and Review, Investment and ESG Committees, provide specialised oversight, enhancing the effectiveness of governance processes.
Transparency and Accountability
- Proactive disclosures: We ensure comprehensive, accurate, and timely disclosures, which provides stakeholders with a clear view of our operational and financial performance
- Integrated reporting: Our Annual Report adopts an integrated approach, demonstrating the interconnectivity of financial performance, strategic goals, and ESG outcomes.
ETHICAL PRACTICES AND RISK MANAGEMENT
- Code of conduct: All employees and Directors are bound by a stringent Code of Conduct that fosters integrity, ethical behaviour, and a zero-tolerance approach to corruption.
- Robust risk management framework: We maintain a proactive risk management framework that identifies, assesses, and mitigates
EMBEDDING ESG INTO OUR CORE
- Green investments We actively invest in sustainable investment avenues, including renewable energy projects and green bonds. During the year, Ceylinco Life was the anchor investor with a LKR 2 Billion investment in the country’s first green bond issued by DFCC Bank.
- Carbon footprint reduction: By optimising enPaperless operationsergy usage in our facilities and promoting digital solutions, we have reduced our carbon footprint by 7% compared to the last year
- Paperless operations: Our transition to paperless documentation and digitalised sales process has not only improved efficiency but also minimized environmental impact
At Ceylinco Life, we recognise the growing importance of ESG considerations in building a sustainable future. Our ESG strategy is deeply integrated into our operations, ensuring that we contribute meaningfully to societal and environmental wellbeing while upholding governance excellence.
ENVIRONMENTAL RESPONSIBILITY
Social Impact
- Customer-centric innovation: We promoted Medical Saver Plan designed to provide enhanced coverage and accessibility, prioritising the critical need of the well-being of society.
- Community engagement: Through programs like Waidya Hamuwa we supported 2,609 individuals by improving access to healthcare. We constructed two classroom buildings for schools in Elpitiya and Batticaloa region
Governance Excellence
- ESG Committee: A dedicated ESG Committee at the Board level oversees the integration of sustainability into strategic decisionmaking.
- Sustainability reporting: We publish an annual ESG report aligned with global standards such as GRI Global Reporting Initiative(GRI framework) SLFRS, S1 and SLFRS S2 (Voluntary adoption), Contribution to SDGs, Contribution to 10 UN principles, ensuring transparency and accountability in our sustainability efforts.
Data Protection and Cybersecurity
Recognizing the sensitivity of customer data, and the changing regulatory enviornment we have appointed a Data Protection Officer and invested in cutting-edge cybersecurity measures to safeguard our systems and ensure regulatory compliance.
Regulatory Compliance: A Pillar of Stability
Compliance with Section 9 of the CSE Listing Rules on Corporate Governance is fundamental to our operations. This year, we;
- Enhanced our corporate disclosures by adopting a more detailed reporting structure for financial and non-financial information.
- Maintained compliance with governance-related provisions, including those pertaining to related party transactions and Directors'independence.
- Strengthened internal controls to ensure alignment with evolving regulatory standards.
Financial and Strategic Performance
Despite global economic uncertainties, Ceylinco Life demonstrated resilience and adaptability. Key highlights include:
- Revenue growth:Achieving a yearon-year growth of 11.16%, driven by our innovative product offerings and customer-focused strategies.
- Market leadership: Retaining our position as the No. 1 life insurer
- Operational efficiency: Streamlining processes and leveraging technology to enhance cost efficiency and service delivery.
Declaration
I hereby wish to confirm that, to the best of my knowledge and belief, I am not aware of any material violations of the provisions of the Code of Best Practice on Corporate Governance issued by CA Sri Lanka, CSE rules on Corporate Governance and the Internal Code of Business Conduct and Ethics of the Company by any Director or any member of the Corporate Management team as of the date of the Annual Report and that the Company has satisfied all statutory payment obligations to the Government and statutory/regulatory bodies.
Looking Ahead
As we move forward, we remain committed to:
- Deepening our ESG integration to address emerging sustainability challenges
- Innovating our product portfolio to meet the evolving needs of our customers.
- Strengthening governance practices to maintain trust and credibility with all stakeholders.
We acknowledge and thank our stakeholders, policyholders, employees and partners for their continued trust and support.
R RENGANATHAN
Executive Chairman
MESSAGE BY THE SENIOR INDEPENDENT DIRECTOR
As the Senior Independent Director (SID) of Ceylinco Life, it is my privilege to provide a perspective on our governance practices, the Board’s role in overseeing sustainable growth and our commitment to creating long-term value for all stakeholders. The year under review has been marked by dynamic changes in the operating environment and our steadfast focus on governance has enabled us to navigate challenges effectively and seize emerging opportunities.
ROLE OF THE SENIOR INDEPENDENT DIRECTOR
The role of the Senior Independent Director is to provide an independent oversight mechanism that ensures transparency, accountability, and objectivity in the Board’s deliberations. In this capacity, I act as a liaison between the Board and shareholders, ensuring that the concerns and expectations of stakeholders are addressed in a timely and transparent manner. My responsibilities include:
- Supporting the Chairman in maintaining an effective governance framework
- Providing counsel and support to Independent Directors and fostering their active contribution
- Ensuring that the Board’s activities align with the Company’s strategic objectives and stakeholder interests
As the SID, I am consulted by the Chairman on governance related matters and I make myself available to any Director as an intermediary to have confidential discussions on affairs of the Company should the need arise. During the year under review, two confidential meetings with Executive Directors and three confidential meetings with NonExecutive Directors were conducted as per the requirements of the Code of Best Practice on Corporate Governance
in order to discuss governance related matters which includes the performance of the Chairman.
FOCUS ON ESG AND SUSTAINABILITY
As global attention increasingly centers on sustainability, we have prioritized embedding ESG principles into our core operations. From an independent perspective, I am pleased with the Board’s proactive approach in addressing these areas:
- Environmental: Our initiatives to reduce carbon emissions and support green investments align with global best practices
- Social:Strengthening and fostering community development through our community-centric initiatives demonstrate our commitment to societal wellbeing
- Governance:Our adherence to Section 9 of the Colombo Stock Exchange (CSE) rules on Corporate Governance though a non-listed entity exemplifies our commitment towards transparency, accountability and regulatory requirements
Ethical Practices and Risk Management
- Code of conduct: All employees and Directors are bound by a stringent Code of Conduct that fosters integrity, ethical behaviour, and a zero-tolerance approach to corruption.
- Robust risk framework: We maintain a proactive risk management framework that identifies, assesses, and mitigates risks across our operations, ensuring business continuity and resilience.
Looking Ahead
As we move forward, the Board remains committed to:
- Strengthening the alignment between our strategy and stakeholder expectations.
- Further integrating ESG considerations into decisionmaking processes.
- Enhancing governance practices to adapt to an evolving regulatory and market landscape.
On behalf of the Board, I thank you for your continued trust and support. We remain dedicated to delivering sustainable growth and enduring value to all our stakeholders.
DR. HARSHA CABRAL PC
Senior Independent Director
Corporate Governance Philosophy at Ceylinco Life
An effective Corporate Governance framework forms the bedrock of strength in achieving an organisation’s objectives while balancing the interests of its key stakeholders, including shareholders, employees, customers, suppliers and the community.
At its core, Corporate Governance aims to ensure accountability, fairness and transparency in a company’s relationship with its stakeholders. By setting the foundation for ethical decision-making and efficient management, Corporate Governance promotes the sustainable success of an organisation.
Ceylinco Life believes in managing its business with accountability and responsibility with a strong commitment towards its stakeholders by providing accurate, adequate and timely disclosures of relevant information. Corporate Governance also encompasses the processes through which the organisation’s objectives are established and pursued within the framework of social, regulatory and market environments. Furthermore, it adheres to the principles of fairness, accountability, stewardship and professionalism.
Ceylinco Life’s Corporate Governance philosophy is reflected in the Company’s business principles, values and business practices. This foundation helps build trust among stakeholders, including the Company’s sole shareholder, employees, policyholders, suppliers, regulatory authorities, and the broader community, ultimately prioritising adherence to the governance framework which is an integral component of the Company’s Corporate Governance structure.
By emphasising on these principles, we have over the years strengthened our governance practices, enhanced stakeholder trust and achieved our strategic objectives in a sustainable manner. This has been the strong foundation which has enabled the Company to achieve its corporate purpose and execute its strategy.
Governance Structure
The governance structure is built on well-defined roles and responsibilities, greater accountability, and clear reporting lines of the Board, Board Committees, Corporate Management and Executive Management Committees. Responsibility and accountability for conducting operations and assuming risk under the purview of the Corporate Management lie with those heading the strategic business units and support functions.
Our governance structure demonstrates how the Board has delegated roles and responsibilities to provide dedicated focus and achieve corporate strategies within the bounds of the four governance dimensions. The Board Committees form an integral part of the governance structure which provides independent and objective judgement on significant corporate matters and ensures that key issues and strategies are objectively reviewed, constructively challenged, thoroughly discussed and rigorously examined. The entire process is examined by the Internal and External Auditors of the Company
The Board of Directors
The Board of Directors of Ceylinco Life plays a pivotal role in guiding the strategic direction towards sustainable value creation. The Board of Directors manages and supervises the overall business of the Company ensuring the best interests of the wider stakeholder groups of the Company.
The Board performs the following functions :
- Guides the Company in examining and approving the strategic direction to achieve sustainable success, and periodically monitor their implementation.
- Plays a key role in defining sustainability policies and strategies, identifying annual and long-term objectives, and monitoring their implementation and evolution.
- Establishes the nature and level of risk appetite with the Company’s strategic objectives
- Sets the Corporate Governance guidelines and rules for the Company
- Ensures the correct management of corporate information through a structured compendium of rules and procedures for the internal management.
- They are the Guardians of shareholder trust and corporate integrity by being the custodians of information concerning the Company and their disclosures.
- Promotes the communication with other stakeholders relevant to the Company.
- During the year 2024, the Company has established and maintained a formal policy governing matters relating to the Board of Directors complying with the Listing Rule
No.9.5.1. To ensure compliance with Listing Rule No. 9.7.1, each member of the Board has declared conformity with the fit and proper assessment criteria outlined in Listing Rule No. 9.7.3 by providing signed declarations for the year under review. Individuals who fail to comply with the criteria as per the above rule will no longer be eligible to serve as Directors of the Company. The Board recognizes the importance of assessing both its own performance and that of its committees to monitor effectiveness, as stipulated in sections A.9.1 and A.9.2 of the Code of Best Practice on Corporate Governance issued by The Institute of Chartered Accountants of Sri Lanka.
- During the year, members of the Board, including the Chairman, and members of committees underwent evaluation to ensure the continued efficiency of both the Board and its committees.
RESPONSIBILITIES OF THE BOARD
Refer to the report on page 261 for the Report of the Board Environmental, Social, and Governance Committee, which outlines the Board ESG Committee structure, roles, and responsibilities.
- Appointing the Chairman and the Senior Independent Director
- Ensuring that the CEO and the management team possess the skills, experience, and knowledge to implement the corporate strategy.
- Ensuring the adoption of an effective succession plan for the CEO and Key Management Personnel
- Approving budgets and major capital expenditure.
- Determining the matters explicitly reserved to the Board and those delegated to the Management including limits of authority and financial delegation.
- Ensuring effective systems to secure the integrity of information, internal controls, business continuity and risk management.
- Ensuring compliance with laws, regulations and ethical standards.
- Ensuring all stakeholder interests are considered in corporate decisions.
- Recognizing sustainable business development in corporate strategy, decisions and activities and considering the need for adopting Integrated Reporting.
- Ensuring that the Company’s values and standards are set with an emphasis on adopting appropriate accounting policies and fostering compliance with financial regulations
- Establishing a process of monitoring and evaluation of progress on strategy implementation, budgets, plans and related risks.
- Ensuring that a process is established
ESG GOVERNANCE – BOARD OVERSIGHT ROLE
Refer to the report on page 261 for the Report of the Board Environmental, Social, and Governance Committee, which outlines the Board ESG Committee structure, roles, and responsibilities.
The Board ESG Committee is responsible for overseeing robust processes for identifying, assessing, and monitoring ESG-related risks and opportunities, reporting quarterly to the Board of Directors. The Executive Risk Committee supports the Board ESG Committee by evaluating ESG-related risks and opportunities before integrating them into the Company’s strategy.
Ceylinco Life aligns its ESG commitments with global frameworks, including the UN Sustainable Development Goals (SDGs), GRI Standards, UN Global Compact, and SLFRS S1 and S2. The company monitors progress against actual performance on a quarterly and annual basis, with a particular focus on energy efficiency and renewable energy adoption.
COMPANY SECRETARY
The Company Secretary plays a pivotal role in guiding the Board of Directors and overseeing the compliance with the Companies Act, Board processes and other relevant rules and regulations. The Board holds the responsibility of appointment and removal of the Company Secretary as prescribed by applicable laws and regulations. By the Board Charter and procedures all Directors are provided access to the counsel and services of the Company Secretary.
The following are the key responsibilities of the Company Secretary
- Facilitating the smooth operation of the Company’s formal decision making and reporting machinery.
- Organising Board and Board subcommittee meetings, formulating meeting agendas with Chairman and/or the Chief Executive Officer and coordinating with the management on Board papers and necessary documentation.
- Ensuring that all proceedings of the meetings are minuted and that the minute books are maintained properly.
- Monitoring that all Board sub-committees are properly constituted and provided with clear terms of reference.
- Ensuring that the Annual General Meetings and Extraordinary General Meetings are held in accordance with the requirements of the Companies Act and the Company’s Articles of Association.
- Ensuring that the Company complies with its Articles of Association.
- Maintaining the statutory registers.
- Continuously reviewing developments in corporate governance.
The Board uses its meetings to discharge its duties and monitor the strategic direction and approach to risk management. Each Board meeting follows a carefully tailored agenda, agreed in advance with the Chairman, CEO and Company Secretary. A typical meeting will comprise reports on current operating and financial performance, strategic risks and opportunities, governance updates and regulatory considerations, a review of the Company’s local and international portfolios, and deeper discussions regarding areas of strategic importance.
1. STRATEGY
During the year, the Board and its various committees discussed, oversaw and monitored Ceylinco Life’s key strategic initiatives.
Financial Performance
- Informative decisions were made by the Board for the safety of all stakeholders as well as the sustainability of the business.
- Divisional KPIs were continuously reviewed by the Strategic Planning Committee during the year.
- Approval and review of systems for improving convenience, reach and accessibility via various customer touchpoints and determining customer needs.
- Unrivalled knowledge, strategy and innovation to identify areas for improvement and drive product innovation and process improvements by using data analytics.
- Focused on process automation, i.e. TR & Collection applications, web based quotation system, e-signature application, Lead application, E-KYC etc..
- Board Risk Management Committee constantly reviewed business continuity plan and cyber security. Operational Investment Committee and Board Investment Committee constantly evaluated sound economic decision making and reported to the Board
- The Board reviewed the Asset Liability Management Policy, Universal Life Distribution Policy, Investment Policy and Loss Limit Policy to be in line with the current economic conditions.
- Corporate Communications and digital channels with various stakeholders.
- Reviewed the Policy on Whistleblowing.
Environmental Sustainability
- Changes were made to put in place a green building construction methodology.
- Invested Rs. 2.0 Bn in Green Bond issued by DFCC Bank PLC.
- Conducting an e-waste campaign.
- Board oversight and approvals for Investments made in solar projects, rain water harvesting, usage of recycled products, etc.
- Ongoing reforestation project in Balangoda, covering 10 acres with 10,000 new trees planted.
- Carried out carbon footprint assessment to measure the Company carbon footprint where the process was audited by Sri Lanka Climate Fund established under the Central Environmental Authority.
- Actively promoting recurrent payment methods to reduce paper usage and fuel consumption.
- Digitalization of onboarding related documentation and creating customer convenience.
- Conversion to SMS and e-premium payment receipts instead of issuing hard copies
- Organizing health camps in rural communities to raise awareness about the prevention and control of non-communicable diseases, with a focus on providing education and resources for healthier lifestyles.
- Assisting the state health system by establishing and maintaining High Dependency Units (HDUs) in five state hospitals, as well as providing essential infrastructure and equipment support to regional hospitals to enhance healthcare services
Social Responsibility
- Reviewed the Policy on Anti-bribery and corruption.
- Review of remuneration for Executive Directors including CEO, senior management staff and all other employees
- Supporting rural schools by improving their infrastructure, including the construction of classroom buildings and other essential facilities to create a conducive learning environment
- Continuing the Ceylinco Life Pranama Scholarship Scheme for the 23rd consecutive year, offering scholarships to the children of policyholders based on their outstanding achievements in Year 5, Ordinary Level, and Advanced Level exams, as well as special accomplishments in extracurricular activities..
- Through Board Audit and Risk Management Committees, the Board assessed the cyber security and IT Governance of the Company
- Review of Policy on Risk Management & Internal Controls and Risk Management Framework.
- The Board maintained an effective communication with the sole shareholder through multiple channels during the year i.e. AGM and its related correspondence.
- Annual assessment of Board skills, composition and its succession plan
- Establishment of a Policy on Relations with Shareholders and Investors.
Corporate Governance
The Board retains ultimate responsibility for the Company’s systems of risk management and internal control and has reviewed their effectiveness during the year. The systems are regularly reviewed and were in place for the financial year under review and up to the date of this report. Key focus areas addressed during the year are discussed in detail in the Risk Management report (pages 76 to 89), Report of the Board Audit Committee (pages 254 to 255) and the Report of the Board Risk Management Committee (pages 259 to 260).
During 2024, CLI continued to focus on strengthening the internal controls, overseeing assurance over non-financial information, including sustainability and ESG disclosures. Based on its assessment, management has concluded that, as of 31 December 2024, CLI’s internal controls over financial reporting are effective
IT GOVERNANCE
In order to align with trends in rapid digitalisation and transformation, the organisation strengthened its governance of the IT function during the year. To this end, the Company enhanced its IT oversight via a robust structure with clearly defined roles and responsibilities, in addition to investing in a range of system improvements and process enhancements.
IT GOVERNANCE AND OVERSIGHT:
The Head of Information Security is equipped with the relevant knowledge and expertise and heads the ICT vertical. ICT functions have been segregated as follows: Information System Developments, ICT Operations (including branch operations), Communication Network and IT Security. An ICT Risk Committee has been established to identify cyber-risks and report to the same to the Chief Risk Officer (CRO). Identified Critical Cyber Risks are then discussed at the ERM Meetings for necessary action.
Head of Internal Audit/ Head of Information Systems Audit
- Develops annual Objective Key Results (OKRs) and aligns these to the overall Company KPIs.
Chief Information Security Officer
- Ensures that the information security strategy is closely aligned with the overall business strategy and governance framework.
Chief Risk Officer
- Responsible for identifying and overseeing overall organisational risks, in addition to developing, facilitating, and monitoring the control framework and execution of risk response strategies.
Data Protection Officer
- To ensure the implemented Personal Data Protection Management Program (PDPMP) is in line with the requirements of the Act to meet the required compliance standards, and to keep the Company informed regarding any new directives issued by the Data Protection Authority.
- Creating awareness on the importance of Data Protection among all sales and nonsales staff and conducting periodic audits on the Company’s PDPMP can also be stated as the duties required to be done by the DPO.
In complying with the Personal Data Protection Act No 09 of 2022, Ceylinco Life as a Controller, has fulfilled the following requirements of the Act:
- The implementation of a Personal Data Protection Management Program (PDPMP)
- Appointing a Data Protection Officer (DPO) with effect from 15th April 2024 in compliance with Section 20 of the Personal Data Protection Act.
The PDPMP ensures that the company has implemented all required measures through its policies and procedures to protect customer and other stakeholders’ personal data.
The responsibilities of the Data Protection Officer are set out on the previous page.
IT and Cyber Risks
With the increased thrust towards digitalisation, the Board is committed to identifying and managing IT-related risks including cybersecurity risks across the Company. A member of the Board is assigned clear responsibilities and a highly skilled IT team ensures that IT risks and vulnerabilities are managed in a holistic and secure manner.
IT Representation at the Board Risk Committee
- Ensured active IT participation in the Board Risk Committee (BRC) to align technology risks with overall enterprise risk management.
- Provided regular updates on cybersecurity, IT governance, compliance, and emerging technology risks to support informed decision-making.
- Contributed to the development of risk mitigation strategies related to IT infrastructure, data protection, and business continuity.
- Strengthened the organization's risk posture by integrating IT risk assessments into broader corporate risk frameworks.
Compliance
The Company is bound by the Code of Business Conduct and Ethics which applies to all employees including KMP's and Directors who are responsible for
overseeing measures to promote and uphold the highest standards of integrity. The code is available on the intranet for all employees and is reinforced at all levels through structured communication. The Compliance Officer reports on the status of statutory and non-statutory compliance to the Board Audit Committee and thereafter such reports will be forwarded to the Board for their evaluation. The Board is not aware of any material violations of any of the provisions of the Code by any Director or employee of the Company.
The Company was compliant with the Regulation of Insurance Industry Act No.43 of 2000 and its subsequent amendments, Companies Act No. 07 of 2007 and the Sri Lanka Accounting and Auditing Standards Act No. 15 of 1995, along with several other applicable legislative enactments during the year under review.
There were no instances of noncompliance with laws and regulations during the year.There were no fines for such instances as well.
4. GOVERNANCE AND STAKEHOLDER INTERESTS
Embedding policy commitments
Our business processes are designed guaranteeing that all workers act in a moral and responsible manner. The Code of Conduct and various other policies incorporated set out the manner in which workers ought to act, while on as well off duty. These policies are documented and communicated in a clear manner allowing easy access to respective parties and necessary training and guidance is given as and when needed.
The Board exercises its oversight on the Company’s policies and practices and is aware of evolving societal, investor and legal expectations. In the exercise of fiduciary responsibilities and oversight, the Board ensures that the necessary policies, systems and incentives are in place to encourage a corporate culture where respect for core policies including human rights throughout the Company and in business relationships is an expected practice.
Ceylinco Life’s policy framework provides reasonable assurance on the effective delivery of the Company’s strategic aspirations. Policies are reviewed and revised annually to ensure applicability to evolving operating conditions.
The Company has established and maintained the following policies in terms of the Rules of the Colombo Stock Exchange and the availability of such policies is published in the Company’s website www.ceylincolife. com.
- Policy on matters relating to the Board of Directors
- Policy on Board Committees
- Policy on Corporate Governance, Nominations and Re-election
- Policy on Remuneration for NonExecutive Directors
- Internal Code of Business Conduct and Ethics for all Directors and Employees
- Policy on Risk Management and Internal Control
- Policy on Relations with Shareholders and Investors
- Policy on Environmental, Social and Governance sustainability
- Policy on Corporate Disclosures
- Policy on Whistleblowing
- Policy on Anti-Bribery and Corruption
- Investment Policy Statement -Policyholders' Fund
- The Policy on Control and Management of Non-Financial Assets
- Investment Policy StatementShareholders Fund
Communication of critical concerns
Ceylinco Life treats the stakeholders as an invaluable asset that governs the business to create enduring value. Therefore, the Company continuously collaborates and engages with the stakeholders to identify and prioritise the interests of the stakeholders on an ongoing basis. The critical concerns of the sole shareholder were directly reported to the Board whereas the concerns of regulators were reported to the Principal Officer, Compliance Officer and the Board of Directors. Details of complaints and concerns reported during the year from various types of stakeholders are published from pages 90 to 98 of this Annual Report.
Relations with Shareholders
The Company places considerable importance on communication with its sole shareholder Ceylinco Holdings PLC (formerly known as Ceylinco Insurance PLC). Various means of ongoing and periodic communications including the AGM, Annual Report, quarterly financial statements, memos, notices published in the newspapers and Company website are used to disseminate information. The shareholder is also encouraged to maintain direct communication with the Company via the Company Secretary. All responses towards any actions decided by the Board are formally communicated and appropriately recorded.
DETAILS OF THE AGM AND KEY MATTERS DISCUSSED
in order to discuss governance related matters which includes the performance of the Chairman.
The Annual General Meeting of the Company was held on 28th March 2024 at 2.30 p.m. at Ceylinco Life Insurance Ltd, No. 106, Havelock Road, Colombo 05.
Key matters discussed were as follows;
- Adopting the Annual Report of the Board of Directors on the affairs of the Company and the Audited Financial Statements for the year ended 31st December 2023 together with the Report of the Auditors
- Approving the first and final dividend of Rs. 15/- per share for the year ended 31st December 2023.
- Re-electon of Mr R Renganathan who retired at the AGM in terms of Section 210 of the Companies Act No.7 of 2007.
- Re-election of Directors, M/s J Durairatnam, W W L R A Fernando and O G V J Senanayake who retired in terms of Article 18B of the Articles of Association of the Company.
- Re-appointment of M/s Ernst & Young, Chartered Accountants as the Company’s Auditors for the ensuing year and authorizing the Directors to determine their remuneration
- Authorizing the Directors to determine contributions to charities and other donations for the year ending 31st December 2024
Engagement with other stakeholders
The Board recognises its accountability towards a wider range of stakeholders such as employees, suppliers, customers and society at large and seek to act in the best interest of such connected stakeholders. Key engagement mechanisms and responses of the Company to matters raised are provided in the 'Stakeholder engagement' section on pages 90 to 98.
Training
On appointment, all Directors receive a comprehensive induction tailored to their individual requirements designed to provide them with an understanding of how the Company works and the key issues that it faces. Directors are kept up-to-date on applicable legislations and regulations relevant sector developments and changes in the risk and general business environment on an ongoing basis. Directors undertake training and professional development as they consider necessary, which requirements are coordinated through the Company Secretary.
The following training sessions were conducted for Directors,
- Personal Data Protection Act and Electronic Transactions Act
- Anti-Corruption Act No. 9 of 2023
- Actuarial Valuations
- Underwriting
- AML/CFT process
Succession planning
Succession remained a key focus for the Board.The Board Nominations and Governance Committee discussed succession planning in detail during the year, in addition to discussions at formal Committee meetings. Robust succession planning ensures that we have the right balance of skills, experience and effectiveness on the Board embracing the clear benefits of diversity while also taking into account current and anticipated future business needs. This includes contingency planning for any unforeseen resignations or orderly refreshing of the Board and SubCommittees and looking ahead to the skills that may be required in the future
Succession planning
The Board is assisted by the Remuneration Committee in determining remuneration of Executive Directors, Non-Executive Directors, KMP and others. Remuneration policy and schemes are designed to attract and retain persons with skills, capabilities and experience required to pursue business objectives.
Remuneration Policy
The Company has an approved remuneration policy which governs the remuneration process of employees and its Executive Directors. The key objective of the policy is to ensure employees are appropriately compensated for the services they provide to the Company, providing flexible and competitive structures, motivate employees to perform in the best interest of the Company and its stakeholders, determine remuneration in a way which ensures equity and consistency and to comply with all relevant legal requirements.
Remuneration is structured taking into account performance and complex responsibilites relevant to the job and is aligned to corporate and individual performance. No individual Director is involved in determining his own remuneration. The Remuneration Committee is responsible for suggesting and approving the Directors’ remuneration and benchmarks it with the market regularly to ensure that it remains competitive to attract and retain talent. The Remuneration Committee sets the principles, parameters and governance framework of the Company’s remuneration policy and recommends the terms and conditions of employment of the Chairman, the Board, Executive Directors and the Senior Management
The remuneration package of the CEO is structured to link rewards to corporate and individual performance, ensuring there is strong alignment between the short-term and long-term goals and interests of the Company. Independent Director’s fees are determined by the Board and supported by the Remuneration Committee which also seeks advice from HR professionals. A Board approved policy is in place for the determination of remuneration for NonExecutive Directors
Diversity and equality
A Board which consists of diverse age groups, gender, skills, experience, perspectives and background creates the right platform for effective governance and sound decision making. The Board of Ceylinco Life encompasses professionals from various backgrounds ranging in the age group of 40 -72 years. The Board consists of 13 male members and 2 female members, ensuring representation of women. Such diversity fosters and encourages better risk management along with greater understanding of the implications of business decisions to stakeholders.
Board Diversity and Commitment to Enhancing Diversity Across the Organization
At Ceylinco Life, we recognize that a diverse Board is essential to driving innovation, making well-rounded decisions, and reflecting the community we serve. Our Board of Directors is composed of individuals with varied backgrounds, perspectives, experiences, and expertise such as accounting, finance and auditing, investment and banking, management, legal, marketing, medical, architectural, engineering, IT, HR which enables us to tackle complex challenges and seize opportunities in an ever-changing business landscape.
We are deeply committed to advancing diversity, equity, and inclusion at all levels of the organization. Our Board serves as a model for this commitment, ensuring that diversity is not only celebrated but embedded in our strategic priorities. We
believe that fostering a diverse workforce is fundamental to our success and longterm sustainability.
In addition to maintaining a diverse Board, we actively work to enhance diversity across our organization by:
- Implementing Inclusive Recruitment Practices
- Providing Growth and Development Opportunities
- Building a Culture of Inclusion
We understand that fostering an inclusive environment is an ongoing journey, and we are dedicated to continually learning, adapting, and driving meaningful change. By enhancing diversity across the organization, we aim to create an environment where every individual can thrive, contribute, and reach their full potential.
2. COMBINED ASSURANCE
4.1 Internal audit
The Internal Audit Department and Information System Audit Department are responsible for reviewing the design and effectiveness of the internal control systems, management information systems, as well as the systems for compliance with applicable laws, regulations, rules and directives.
Audits are carried out based on the risk based Internal and Information system annual audit plans which are reviewed and approved by the Audit Committee. The Audit Committee conducts quarterly reviews to address significant findings with respect to non-compliances or ineffectiveness.
4.2 External audit
Following the AGM held in 2024, Messrs. Ernst & Young were appointed as external auditors of the Company for 2024. The Board Audit Committee oversees the terms of engagement, skills and experience and the work of the external auditors annually and remains satisfied with the independence, objectivity and effectiveness of Messrs. Ernst & Young in rendering their audit and non-audit services.
At the Audit Committee Meeting held on 19th February 2025, Messrs. Ernst & Young submitted their Annual Statement confirming independence in relation to the external audit as required by the Companies Act No. 07 of 2007 and their re-appointment for the year 2025 will be recommended to the shareholder by the Board of Directors at the upcoming AGM.
COMPLIANCE WITH THE CODE OF BEST PRACTICE ON CORPORATE GOVERNANCE ISSUED BY THE INSTITUTE OF CHARTERED ACCOUNTANTS OF SRI LANKA (‘THE CODE’)
The status of compliance with the Code is given below:
DIRECTION NO. 02 OF 2022 (REVISED) - CORPORATE GOVERNANCE FRAMEWORK FOR INSURERS ISSUED BY THE INSURANCE REGULATORY COMMISSION OF SRI LANKA (IRCSL) UNDER SEC.96 (A) OF THE INSURANCE ACT NO. 43 OF 2000
The status of compliance with the Direction No.02 of 2022 (Revised) issued by the IRCSL on 25th February 2022 is given below
COMPLIANCE WITH SECTION 9 OF THE LISTING RULES OF THE COLOMBO STOCK EXCHANGE [CSE] ON CORPORATE GOVERNANCE (AMENDED RULES IN LIEU OF SECTION 7.10 OF THE CSE LISTING RULES)
The status of compliance with the Section 9 of the Listing Rules of the CSE is given below
