REGULATIONS FOR the mandatory appointment of external auditors and actuaries by insurance companies, and the establishment of internal committees for auditing, review of conduct, and the oversight of investment and loan policy, were the main items on the agenda when the Joint Select Committee on the Insurance Act reconvened at Gordon House, last week.
The Committee, chaired by Dr. Omar Davies, Finance Minister, is drafting the Insurance Act of 2000, which will repeal and replace the existing Insurance Act.
It is proposed that each registered insurer and insurance intermediary be required to appoint an external auditor and actuary, who will report to the company's board of directors and the Financial Services Commission (FSC).
The auditor will conduct regular audits, looking out for problems which could adversely affect the insurer's financial viability, while the actuary will value the company's actuarial reserves and other policy liabilities. Details of these must be simultaneously reported to the board of directors and the FSC.
The Committee agreed that actuarial reports from the companies would be required on an annual basis for life insurers, while general insurers would have greater latitude in the frequency of these reviews as determined by the FSC.
There was, however, a clash of opinions concerning the composition of companies' internal audit and investment and loan committees.
Opposition Senators Anthony Johnson and Oswald Harding voiced strong disagreement to clauses proposing that the majority of the members of the two committees should not be officers or employees of the company or an associated company. They argued that dictating who should be part of the committees was tantamount to interfering in insurance companies and attempting to micro-manage them.
However, some members of the insurance sector disagreed with this view, noting that it was in keeping with the international movement towards minimum standards of operation in insurance.
The matter was deferred for later consideration, with Dr. Davies asking committee members to consider how to reach some compromise on the two positions.
