Denis St. Bernard, Contributor
THE REGION'S insurers met this week in Trinidad for the Insurance Association of the Caribbean (IAC) conference entitled "A Brave New World".
The conference was attended by more than 500 delegates, sponsors and speakers from 33 countries. Jamaica had a total of 39 delegates present, with two appointments to the Board of the IAC, namely managing director of Victoria Mutual Insurance Company Ian Rowlands to the post of third vice-president, and managing director of Allied Insurance Brokers Sandra Donaldson as director.
After a theatrical opening stunt, which took the large audience back to the beginning of time in the insurance business, the conference was officially opened by the Prime Minister of Trinidad & Tobago Basdeo Panday.
In his opening address Mr. Panday indicated that liberalisation is already here, therefore we in this region need to get our act together quickly. He stressed the need for investment in education and also took the opportunity to encourage the many insurers present to invest heavily in the energy sector of Trinidad & Tobago, which at present has potential for tremendous returns and sited CLICO (Colonial Life Insurance Company ) as an example and model. CLICO's investment into the methanol plan, saw recent profits soaring upwards of US$400,000.
In preparing for battle in this "Brave New World", one of the key components highlighted was that of e-commerce or e-business, as technology continues to chart new ways of doing business globally. Its impact on the regional insurance market is tremendous, especially as consumers needs begin to change as they are now becoming increasingly aware and exposed.
Another area of focus was that of the region's regulatory framework. The issue of convergence of the financial and insurance markets has been one that has been of tremendous interest to this sector for the past decade.
Mr. Panday said that his Government has taken a decision to integrate the supervision of financial institutions. This, he added will bring Trinidad and Tobago in line with countries such as Australia, Canada, Singapore and the United Kingdom which have all opted for integrated supervision of financial institutions in varying permutations. In explaining the rationale for the decision, Mr. Panday stated that integrated supervision is expected to facilitate co-ordinated and comprehensive oversight of the broad financial services industry and that it will be undertaken in a three-stage approach.
In the first stage, said Mr. Panday, the supervision of insurance companies and pension plans will be integrated with that of banking institutions operating under the authority of the existing bank inspection department of the central bank. Parallel with this, a mechanism for regulation and supervision of the mutual funds industry is to be established under the control of the Trinidad and Tobago Securities and Exchange Commission.
Phase two, said Mr. Panday, "envisages the clustering of all financial institutions under one supervisory body, with the SEC remaining a parallel entity." The third stage calls for the supervision of all financial products and services providers by a single authority. However, the timeline is still to be worked out.
Other countries in the region are also currently having discussions with regard to streamlining their regulatory framework to be able to equip themselves to deal with global changes and this "brave new world".
Jamaica's Minister of Finance Dr. Omar Davies recently appointed Dr. Owen Jefferson to chair a Task Force to spearhead the merging of the Insurance, Securities and Pensions Regulations, similar to the structure outlined by Prime Minister Panday.
It is expected that a Common Regulatory Framework would be in place by April 1, 2001.
However, there is a concern that while many of the countries in the region are modernising their regulatory framework, there is yet to be a concerted effort for them to integrate these regulations in an effort to speak with a common voice, especially now where issues like a Caribbean Court of Justice, the free movement of labour and capital etc. are trends within the region.
Denis St. Bernard is an insurance & marketing consultant. He is also the co-host of Risky Business, a radio programme which deals with risk & insurance matters.
