Debate on the Insurance (Amendment) Bill 2013 is expected at today’s sitting in the Senate as Government attempts to address frailties in the insurance industry. Finance and the Economy Minister Larry Howai introduced the bill last month which seeks to improve laws relating to insurance companies by repealing and replacing the old Insurance Act. Following heavy criticism of the Central Bank over its handling of the 2009 collapse of CL Financial and Clico, the bill would give the Central Bank regulatory authority and a wider range of corrective and preventive powers.
Such powers include overseeing insurance companies and privately administered pension fund plans. In a previous interview, Howai said the objective of the bill was to “strengthen the supervisory and regulatory framework, balance the risk and burdens of the sector, reduce moral hazard and make the insurance system more robust.” He said T&T’s insurance governance trailed some of its Caribbean counterparts and the bill was necessary to address the sector’s “weak regulatory framework.” The bill follows certain guidelines from the International Monetary Fund (IMF) and the International Association of Insurance Supervisors.
It has received support from Central Bank governor Jwala Rambaran who said there were many pension funds facing challenges and it was important for the authority to have the ability to examine the funds and provide the necessary regulatory advice. If passed, the Central Bank would be mandated to produce an annual report on the performance of the insurance industry and appoint an inspector to investigate and delegate over companies. At last sitting of the Upper House, Government was able to pass the Finance (Supplementary Appropriation) (Financial Year 2013) Bill, 2013.