BASSETERRE, St. Kitts – WITH the unfolding financial crisis and recent liquidity problems of CL Financial Group, Minister of Finance Hon. Dr. Timothy Harris has stressed the need for quality legislation and oversight of the financial and non-financial sectors in order to safeguard local depositors and the region at large.
Trinidad-based conglomerate CL Financial is the parent company of Colonial Life Insurance Company (CLICO) and British American Insurance, which both operate in several Caribbean islands.
Harris told SKNVibes that the region has already begun discussions on the creation of a new insurance policy to provide a greater degree of protection for depositors, investors and taxpayers of the Caribbean. He added that the region must not leave people exposed, adding that “we cannot rely solely on voluntary compliance with best standards; we must hold management accountable”.
“We are going to be discussing these issues in greater detail at the Eastern Caribbean Central Bank (ECCB) Monetary Council Meeting to be held on February 13. We recognize that addressing the [region’s] regulatory framework is a major public policy response to [reduce] the impact of the financial crisis on the region.
“The regulatory requirements of the legislation that we are currently operating under are very limited; some of the new imperatives are not included. The financial service sector has become increasingly complex and the new insurance legislation must be comprehensive and futuristic enough to accommodate new financial features.
“We recognize that in some jurisdictions of Member States, legislation is very much out of date. In our last meeting, many of the members reconfirmed their interest for a common legislation to be prepared for all member States to be governed by.”
Dr. Harris informed that on February 9, the ECCB issued a draft of a regional insurance bill which his Ministry is currently examining to ensure that the new legislation meets regulatory standards.
He added that the ECCB is working closely with Member States to revamp banking and insurance laws and to bring credit unions and money service providers under enhanced regulation.
The Minister of Finance stated that the upcoming meeting at the ECCB would address giving increased power to the Registrar of Insurance, establishing insurance funds, restricting the use of funds, establishing accounting requirements, and assessing the need for public report and governance structure.
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