FINANCE MINISTER Colm Imbert has identified the collapse of Clico and other local financial institutions as the impetus which was needed to bring legislation to modernise the nation’s insurance industry.
And even as he piloted the Insurance Bill in the Senate yesterday, Imbert said the combined total assets of both the insurance industry and pension sector were some TT $100 Billion dollars.
He said the bill is a “very large, a very thick document” with some 282 clauses designed to “reform and transform insurance legislation.”
“We had unanimous agreement in the other place, (the House of Representatives) on this legislation. It is a special majority legislation and it’s very disappointing...we are all disappointed that in the aftermath of the CL Financial, Clico crisis of 2009, that our insurance sector is still being governed by woefully deficient legislation which dates back to 1980, and which cannot adequately address the current emerging risks in today’s insurance sector.
“Our own Clico crisis as, well as other stresses in other insurance companies in our local industry, convinced everyone of the need for modern legislation to cope with the modern sector.”
He said as of September 30 last year, the insurance industry’s assets totalled some $49.4 billion or 33 per cent of GDP, while total assets under the pension sector’s management totalled $51.4 billion or some 34 per cent of GDP.
Imbert said the current legislation did not require insurance companies to maintain “adequate capital buffers for risks on their balance sheets” as general insurance companies were only required to have a share capital of one million dollars.
He said, by contrast, the banking and securities sector are governed by “far more modern legislation such as the Financial Institutions Act and Securities Act.”
He said TT’s insurance legislation was lagging “way behind” other Caribbean countries such as Jamaica.