A step in the right direction for insurance regulators

The Caribbean Association of Insurance Regulators (CAIR) has been commended for seeking to ensure that the work of its membership is in line with international best practices.

Addressing those attending the 2014 CAIR Workshop and Meetings for Insurance Supervisors at the Hilton Hotel, Courtney Christie-Veitch, Financial Sector Advisor with the Caribbean Regional Technical Assistance Centre (CARTAC) said the theme ‘Closing the Gap: Greater Focus on the Insurance Core Principles (ICPs)’ is timely as several regulators in the region embark on a programme of self-assessment against the core principles of the International Association of Insurance Supervisors (IAIS), in preparation for their next International Monetary Fund or World Bank Financial Sector Assessment Programme.

Some of those attending the Caribbean Association of Insurance
Regulators’ conference at the Hilton Barbados Hotel.

He said that the focus on Group-Wide Supervision – ICP 23, and Macro Prudential Surveillance and Insurance Supervision – ICP 24 and stress testing are timely topics, as regulators in the region grapple with issues such as high levels of interconnectedness, substitutability and contagion, which he added, are coming on the back of what can be considered the largest regional failure of a financial conglomerate.

“Everybody knows the story of CLICO and it is hoped that regional regulators will take seriously the lessons learnt from the collapse of CLICO which includes governance and oversight issues, complex corporate structures and high levels of interconnectedness, weak internal controls [and] heightened concentration risks… And it is hoped that we will really use this opportunity to learn the important lessons and to strengthen our supervision and regulatory framework,” he said.

Meanwhile, delivering his address, Chairman of the Financial Services Commission of Barbados, Sir Frank Alleyne also commended the organisers for their choice of theme, contending that he was of the strong belief that the decision to focus on the best practices, as set out by IAIS, is a step in the right direction for insurance regulators in the Caribbean sub-region.

Sir Frank told those gathered that the use of international best practices as a benchmark for our regional regulatory framework will serve to ensure that regional regulatory practices are comparable with the standard of any insurance regulator across the world. However, he suggested that while they may use international practices as a benchmark, efforts should be made to consider the uniqueness of the respective domestic insurance markets when implementing the regulatory frameworks. (JRT)