Plans are in the making to overhaul the regulation of the domestic insurance sector here.{{more}}

This reform is expected to begin with the amendment of insurance legislation to ensure that the sector is in accordance with internationally accepted insurance standards and will be a part of an initiative to harmonize insurance legislation in the Eastern Caribbean.

The points were made at a forum hosted by the St Vincent and the Grenadines Chamber of Industry and Commerce held last week Thursday, March 18.

The forum was held under the theme “The Insurance Sector: the past, the present and the future”. The main objective being that of providing a better understanding of the current financial turmoil facing British American Insurance Company (BAICO) and to highlight the lessons learnt from the experiences of our Caribbean counterparts and the plans to stabilize and reform the financial sector.

Mintrue Rose, Senior Compliance Officer in the Ministry of Finance speaking of the future of the insurance sector added that the aim of this reform was to maintain an “efficient, fair and stable insurance market for the benefit and protection of policy holders.”

According to Rose, the BAICO situation highlighted the need for consolidated supervision and that steps are already being taken to begin this process which is aimed at sharing information on emerging trends and the risks associated with the insurance sector.

This is expected to be accomplished by placing greater emphasis on capital adequacy and solvency requirements, onsite and offsite inspections, restrictions on related party transactions, the introductions of quarterly reporting requirements and focusing in on compliance.

Brian Glasgow, Judicial Manager for BAICO in his presentation ‘what can policyholders of British American Insurance Company now expect’ indicated that the demise of the company was due to the financial problems which affected CL Financial.

He noted that the best prospect for policy holders is the new entity that is being formed in partnership with an international firm.

With the new proposed arrangement, the Eastern Caribbean countries will have temporary ownership.

Glasgow added that once the new entity was created, investors and policy holders will not be able to access their monies as the survival of the entity must be protected.