Equity fights licence revocation in court

Regulators have revoked the licence of Equity Insurance Company Ltd and banned it from writing any new business, but the insurer has responded by taking the insurance watchdog to court, Barbados TODAY can reveal.

This turn of events follows the findings of a damning report submitted to the Financial Services Commission (FSC) by Craig Waterman, the restructuring expert the FSC appointed last year to manage the beleaguered general insurer after the commission seized control of its operations.

The Waterman report confirmed an initial assessment by the regulators that Equity committed serious breaches of the laws and regulations governing domestic insurance entities and international best practices.

In response to this latest development, Equity has begun legal proceedings against the FSC, which in August last year seized control of the company. The regulator cited unresolved breaches of multiple laws and ongoing threats to consumer interests.

The commission – the watchdog for insurance companies, credit unions, mutual funds, registered pension funds and securities – in a move it said was designed to restore confidence and operational integrity at Equity Insurance, appointed Waterman, the restructuring expert from PricewaterhouseCoopers SRL (PwC), to manage the insurance provider until further notice.

Waterman’s appointment, which took effect on August 18, 2025, along with the seizure of the insurance firm, were part of the commission’s enforcement powers, which it said are used “effectively and proportionately” to fulfil its regulatory objectives by compelling observance of the “requirements of applicable legislative and regulatory frameworks in a manner that is transparent, consistent, and aligned with established laws, policies, and procedures”.

At that time, stakeholders and policyholders had been advised that the commission would continue to closely monitor developments and provide further updates as appropriate.

In a comprehensive update, which Waterman shared with Barbados TODAY, the revocation of Equity’s licence was revealed as further enforcement action that has been taken.

“The Manager’s Report confirmed the Commission’s opinion that Equity is not maintaining high standards of financial probity or following sound business practices and has committed serious breaches of the FSCA [Financial Services Commission Act], the regulations, the guidelines and the Insurance Act, Cap. 310,” the regulator stated in the update.

The commission said it wrote to, and met with, Equity on November 18, 2025, to advise it of the extension of the appointment of Waterman as manager, and the commission’s determination that further enforcement action is necessary.

The FSC said that in response, “Equity initiated legal proceedings (Claim No. CIV1497/2025).” It did not elaborate.

The regulator added: “Having duly consulted with the Minister responsible for Finance, the Commission determined that Equity’s Class 2 Licence should be revoked. The Commission issued Notice of Revocation effective December 31, 2025.”

The commission then outlined what it said were the implications of the revocation:

• Equity is prohibited from issuing any new insurance policies;

• Equity is no longer permitted to renew any existing policies; and

• All policies issued or renewed prior to December 31, 2025, will remain in force and legitimate claims emanating from the same will be honoured during a one-year runoff period.

The FSC also emphasised that a financial institution which is aggrieved by the revocation of its licence may, within 30 days of the receipt of notification, appeal to the Tribunal.

The commission contended that it is committed to upholding fairness throughout its enforcement actions, thereby ensuring that individuals and entities subject to its powers are treated equitably, while promoting compliance.

On July 14, the FSC issued a formal notice (Notice No. LSED 2025/01), expressing its intention to assume management and control of Equity Insurance. The company was given until August 4 to submit written objections and demonstrate why enforcement should not proceed.

Equity responded with a letter of objection and an independent assessment conducted by Compass Advisory Services Inc. However, following a review, the FSC concluded: “Equity Insurance Company Ltd has not sufficiently remediated its serious breaches of the Financial Services Commission Act 2010-21, the Insurance Act, Cap. 310, guidelines and established international best practices.”

The general insurance company, which operates from Collymore Rock, St Michael, was founded by Francis Pounder, who is also managing director, according to the company’s website.