The Finance Ministry has shut down Sujja Insurance Plc for failing to set aside unearned premium reserves, loss reserves and other provisions as required by law.
Its financial statements were also not verified by an accredited auditor, the ministry said.
"The Ministry found that the company failed to set aside full provisions as required by law, while its liabilities exceeded assets and the company then had financial problems," the Finance Ministry said in a release. "If the company continues with its non-life insurance business, it would cause damage to people or insured persons. Therefore, the finance minister has ordered the company's non-life insurance licence be revoked from Aug 10, 2017."
Sujja Insurance's auditor had stated that it was unable to verify financial statements and provide an opinion on the audit results because of uncertainty over the company's ability to continue in business and its solvency capital reserves having plunged 312.9% at the end of April.
Sujja Insurance used to be called Kamol Insurance, which was prevented by the Office of the Insurance Commission from writing new insurance policies in September 2015 because of a capital shortfall and failure to set aside unearned premium reserves and loss reserves.