The insurance industry, though initially challenged, has not, up to now, fared as badly from the economic downturn caused by the COVID-19 pandemic as the sector and regulatory authorities had been bracing for. That’s the assessment from the new president of the Insurance Association of Jamaica, IAJ, Oliver Tomlinson.
Still, sector regulator Financial Services Commission, FSC, has submitted recommendations to the Government for legislative action, which the commission says will further secure policyholders, protect companies, and ensure the continued macroprudential integrity of the sector.
Officials of the FSC are tight-lipped on the proposals placed before the Ministry of Finance & Planning, and would not speculate about the timetable for the Government’s response in the form of a new policy and law.
They confirmed, however, that the submission relates to capital adequacy and the methodology of its calculation. The proposals also follow extensive consultations with stakeholders, including policyholders, insurance companies and the Bank of Jamaica, BOJ, among others.
The FSC’s action comes as the central bank has also stepped up its monitoring of the health of the country’s financial system in the wake of the pandemic, issuing a macro-prudential policy report in October and signalling another for November. The BOJ’s October report has flagged the need to “mitigate and prevent excessive credit growth and leverage; mitigate and prevent excessive maturity mismatches and market illiquidity; limit direct and indirect exposure concentrations; limit the impact of interconnectedness and systemic importance; and strengthen the resilience of the financial system”.