The Eastern Caribbean Central Bank is partnering with The World Bank to implement a New Insurance and Pension Bill for the people of the Eastern Caribbean Currency Union (ECCU) that will see more stringent regulation especially of the insurance sector.
According to the ECCB this new Bill will provide greater financial protection; and more choice of insurers, and insurance and pension products for people of the ECCU. World Bank Consultant assigned to this project, Michael Hafeman, explains how the Bill will protect consumers, what has been done so far and the next steps towards effecting this new legislation.
“The Bill is quite comprehensive. It deals with all aspects of regulating and supervising the pension and insurance sectors, covering things such as the licensing of entities that are operating in the sector and intermediaries in the case of insurance that are selling insurance and providing services to customers. It also deals with the conduct of entities and a lot of provisions about the solvency of the providers- so trying to make sure that the insurance companies and the pension plans that people are relying on to to provide benefits are financially strong enough to do so.
“It also deals with the Eastern Caribbean Financial Services Commission which is a proposed regulatory body that would work in the region and oversee these industries; so it talks about the powers and responsibilities of that organization, the way it will be funded, and how it will deal with things that they might not like that they’re seeing happening in the sector.”
The World Bank consultant said there was need for some reform of the proposed legislation to accommodate centralized regulation with respect to licensing of entities, so that a company wishing to operate in more than one territory in the ECCU would not have to apply for a license in each individual country.
The Bill has gone through several drafts over the past few years and the technocrat says that is to ensure it is fine tuned to be harmonious and to meet international standards. Mr. Hafeman explained how the bill will affect the average ECCU citizen.
“Portions of most interest of consumers would be things that deal with the behavior and governance of insurance companies and pension plans and what they are suppose to be doing in the way they operate and how they treat the consumers they deal with. For example, it talks about processes and systems for dealing with complaints – meaning they have the right to complain to providers if they’re not happy and if they’re not satisfied they can go to the Commission and seek some help from them.
“It talks about the need to pay claims in a timely and fair manner and if they are not paid in a timely manner, then the consumers are entitled to interest on the amount that’s due to them. So those types of protection are there.”
With regard enforcement of the requirements of the legislation, the Financial Commission can take actions against insurers and other players who do not comply, including fining offenders or even prosecuting them.
Freedom FM understands that the new Insurance and Pension Bill is on the agenda for the 95th Meeting of the ECCU Monetary Council on 14th February in St Kitts.