St. George’s, June 5, 2010 – A regional insurance professional claims that insurers in the Organisation of Eastern Caribbean States (OECS) are being unfairly penalised by governments who “do not understand insurance.’’
St. Lucian Claudius Francis is unimpressed with the Insurance Act that has the backing of the Eastern Caribbean Currency Union (ECCU).
“This Act is meant to punish,’’ Francis charged June 4 during a lecture at the Trade Centre organised by the Association of Grenada Insurance Companies (AGIC). It was part of an AGIC week of activities that was held under the theme, “Insurance: It’s Role, Impact and Future in our Society.’’
The week of activities, a first for the local insurance industry, was the brainchild of AGIC President, Molly Roberts. She said it was an information-sharing and bonding exercise for industry representatives, as well as an opportunity to educate Grenadians on the importance of insurance.
“Nothing moves without insurance,’’ Roberts said.
Francis, President of the OECS Insurance Association, highlighted the importance of insurance to the regional economy, including the tourism sector.
“There could be no tourism industry if there is no insurance,’’ said Francis, who has lived and travelled in the Caribbean on business and as a table tennis player. “There is no aspect of economic life that can exist without insurance.’’
He said with such things as private health and life insurance, governments are relieved of a “great burden.’’ However, he chastised OECS administrations, saying they don’t “understand the benefits of insurance. It’s as simple as that.’’
OECS countries, which are also members of the ECCU, drafted legislation for the financial sector – which includes insurance companies and agents – mainly in response to the collapse of CLICO and the difficulties of British American Insurance Company Ltd.
The legislation, which Francis described as “coordinated’’ but not “unified,’’ has either been passed or it’s still in the bill stage. It is expected to become law in all OECS countries, except Montserrat and Anguilla, which are British-dependent territories.
The Insurance Act came into effect in Grenada last March, as part of what government said are efforts at stronger regulation and supervision of insurance companies.
Among other things, it increases the capital and solvency requirements for insurance companies and makes provision for the establishment of statutory funds to protect policyholders’ liabilities. The Act also imposes penalties on companies and their officers for non-compliance, and strengthens the supervisory and regulatory powers of GARFIN as the Supervisor of Insurance.
GARFIN – the Grenada Authority For the Regulation of Financial Institutions – is headed by Angus Smith as Executive Director, with the authority having responsibility for regulating and supervising not just insurance companies, but the entire “non-bank financial sector.’’
Those named as part of the “non-bank financial sector’’ include Building, Co-operative and Friendly Societies, as well as Grenadians involved in currency exchange and the issuance and sale of travellers’ cheques.
Francis said regional countries have always had regulation but never “proper’’ regulators. He does not believe the industry could be effectively supervised and regulated by anyone whose expertise is not in insurance.
“Insurance is a peculiar thing that requires a peculiar animal to regulate it,’’ Francis argued. “It needs someone who knows about it and understands it.’’
Francis said while he supports “strong and fair regulation,’’ he is critical of the OECS Insurance Act, calling it too punitive with threats of fines for companies and individuals.
He chided Grenada’s insurance sector for being too fragmented and divided, and encouraged insurers here to treat insurance as a career by seeking further professional training.
“Insurance is extremely important. You cannot work in insurance and do not treat it as a career,’’ Francis said.
He suggested a model used in St. Lucia, where there is an institute for training and an Insurance Council that disciplines agents for ethical violations, and certifies all garages in the country. Francis is President of the Insurance Council of St. Lucia.
“For the way forward, you must have a strong insurance institute,’’ Francis told the Trade Centre audience that included MP Peter David, Grenada’s Minister of Foreign Affairs.
“Insurance laws,’’ Francis added, “change almost on a daily basis. You need to keep abreast and the way to keep abreast is to have a good and solid institute.’’
No comments:
Post a Comment