Fitch Ratings upgraded Sri Lanka Insurance Corp. Ltd.'s national insurer financial strength rating and national long-term rating to AA+(lka) from AA(lka) and assigned a stable outlook.

At the same time, Fitch affirmed the insurer's international insurer financial strength rating at B+, with a stable outlook.

The rating agency said the ratings upgrade reflects its more positive view of the government's 99.9% ownership stake in the insurer following a recent proposal to exempt the insurer from the regulatory requirement that all insurers must be listed.

The ratings also take into account the bank's sound profitability, healthy capitalization, established franchise and market position in Sri Lanka, Fitch said. The strengths are offset by the insurer's significant investments in noncore units and a high equity exposure.