According to a circular issued by the Commission, the new regulation will come into effect from May 1.
At present, vehicle owners are allowed a credit period of between 60 and 90 days to make payments for their motor insurance policies.
Speaking at a recent media briefing, officials of the Insurance Regulatory Commission stated that further measures will be introduced in the future to completely abolish the credit period system.
Lasitha Wimalarathna, Chairman of the association, told the media that the insurance sector in Sri Lanka is gradually moving towards international standards, under which insurance coverage is generally activated only after payment is received.
He noted that in developed markets, payment is typically made in advance of coverage, and said the local industry is adopting a similar model as part of efforts to improve financial discipline and operational standards.
Accordingly, from May 1, motor insurance customers will only be entitled to a maximum credit period of 30 days, marking the first phase of a broader plan to eventually end post-payment insurance coverage.
