ST. GEORGE’S, Grenada: A regional insurance professional says insurers in the Organization of Eastern Caribbean States (OECS) are being unfairly penalized by governments who do not understand the industry.
President of the OECS Insurance Association, Claudius Francis, says he is not impressed with the OECS Insurance Act, which is supported by the Eastern Caribbean Currency Union (ECCU).
“This Act is meant to punish,” said Francis during a lecture organized by the Association of Grenada Insurance Companies (AGIC).
The lecture was part of an AGIC week of activities that was held under the theme – “Insurance: It’s Role, Impact and Future in our Society”.
Francis 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. “There is no aspect of economic life that can exist without insurance.”
Francis said with such things as private health and life insurance, governments are relieved of a “great burden”. However, he chastised the OECS, 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 is still in the bill stage in some territories. 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 were efforts at stronger regulation and supervision of insurance companies. 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 the Supervisor of Insurance.
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,” said Francis. “It needs someone who knows about it and understands it.”
Francis said while he supports “strong and fair regulation”, he does not support 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 to treat insurance as a career by seeking further professional training.
“Insurance is extremely important,” Francis said. “You cannot work in insurance and do not treat it as a career.”