Major make-over for regulator

The Financial Services Commission (FSC) is at an advanced stage of transformation, which should allow it to be more agile and responsive in its regulation and supervision.
“The FSC transformation plan will support the effectiveness of our risk-based regulatory framework and efficiencies of our regulatory processes,” said chairman Oliver Jordan.
With the fresh approach being adopted, Jordan said, the regulator continued to strengthen its framework to ensure adequate systems and monitoring mechanisms are in place. He said the FSC had already improved its collaboration with the Central Bank of Barbados.
Delivering a presentation on Meeting Best Practices with Agile Regulation, the chairman told a gathering of global business representatives that he was hoping that the FSC transformation “will bring the kind of growth to our sector that we anticipate based on ongoing trends”.
He noted that while there was some moderate decline in the number of registrants in the insurance sector last year, the market remains “enviable”.
“Last year’s performance was largely driven by a range of exogenous factors such as climate risk, inflation and notable increases in reinsurance costs. Nonetheless, in 2022 there were 10 new captive formations, compared to the 34 in 2021,” he reported.
He said the plan included a number of critical changes at the FSC including transitioning to a risk-based supervision structure, increasing capacity and competencies and upgrading the technology infrastructure.
The FSC will also make necessary changes to its delegated authorities that will improve its response times to existing and new registrants, and it will also be pursuing necessary legislative amendments “that better reflect how we as regulators need to function in an evolving business environment,” said Jordan.
He was addressing the opening of the second annual Barbados Risk and Insurance Management Conference 2023 at the Hilton Barbados Resort, hosted by the Barbados International Business Association (BIBA).
The two-day hybrid event, which has attracted speakers and delegates from Barbados and the rest of the region, Canada, the United Kingdom, the United States and Latin America, will examine a range of topics including cybersecurity, AML regulation and other regulatory changes and captive insurance.
He said that as the 12-year-old FSC continues its transformation, heavy focus was being placed on building out five main areas – resilient regulation, regulatory innovation, consumer education, registration and licensing enhancements and risk management.
Noting that regulation and supervision can sometimes “strangle efforts to operate in real-time based on current developments”, Jordan said it was critical for regulators and the regulated to work closer together to “mutually advance” functions and mandates.
He indicated that the FSC was willing to employ a more flexible approach in its oversight through greater “stakeholder engagement, alternative supervision and experimentation” to make the jurisdiction more attractive. He pointed to the regulatory sandbox as one example of such an approach.
He revealed that the FinTech Advisory Committee has put forward recommendations regarding the financial technology industry and the FSC was in the process of drafting new guidelines, which will be made available for consultation in the coming months.
Jordan gave assurance that educating consumers will be a major plank of the FSC’s work going forward, as he gave the assurance that the regulator will continue to be vigilant to safeguard consumers.
(MM)