Acting Chief Executive Officer of the Financial Services Commission (FSC) Kester Guy is calling for updated legislation to govern the insurance industry here.
Though not saying if the sector were at risk due to outdated legislation, Guy said it was important to update laws governing the sector regularly in order to strengthen some aspects of the industry, maintain stability and keep up with international and innovative changes.
“The FSC recognizes that the insurance industry is a key pillar in the stability of our financial market and will therefore ensure that the regulatory framework is able to maintain the industry now and well into the future,” Guy told this week’s 31st annual Sales Congress for the Caribbean Association of Insurance and Financial Advisors held here and which focused on, The Regulatory Framework in Which You Operate.
“There are some ways forward and some strides that still have to be made. Our legislative framework, there still needs to be very many fine-tuning, some of our legislation are a bit dated and needs to be adjusted and there is review for reporting forms and data requirements, which is intended to strengthen risk assessment and trace contagion effects across the financial sector, both within its domestic jurisdiction and various other jurisdictions,” he added.
His comments came as the region continues to face mounting pressure from international sources on various risks including money laundering and other forms of financial crimes.
The former Central Bank senior economist told the insurance industry officials the region was still recovering from the fallout of the 2008/2009 economic crisis, adding that the regulatory body was now challenged to find the right balance of market demands, its function of ensuring financial stability and the “new and ever increasing requirements and demands from global standards”.
“The regulatory framework, particularly in small open economies like ours, is constantly being scrutinized by these international bodies and if not up to par it is likely to receive negative reviews, which are debilitating to our reputation, of our jurisdiction and can very well undermine the confidence of the population in the financial system,” Guy said.
However, the FSC boss gave the assurance that the regulatory agency here would continue to “promote the maintenance of sound, viable and well-managed institutions; consumer confidence and public respect; appropriate mitigation strategies to protect all stakeholders and fairness in the marketplace; support and ensure compliance with all appropriate standards and legal framework”.
He stressed that regulators needed to be innovative and not be barriers to progress.
“Good regulation is a facilitator of progress, and spur growth, investment and confidence within our system. We live in a dynamic environment, which is ever changing and invariably the way we do business will change. You must be flexible and proactive in order to manage this change and stay at least in line with the curve,” he told the financial advisors and life underwriters from Barbados and the region.
“A stable and reliable framework is critical to the activities in which you engage and it is recognized that the insurance industry requires regulatory framework that supports you in fulfilling your role in the economy,” Guy insisted.