Prime Minister Dr. Ralph Gonsalves lifted Vincentians’ consciousness as he gave an account of the nature and character of insurance business.
Delivering the feature address at the official launching of CLICO Financial Centre last Monday, Dr. Gonsalves praised CLICO for demonstrating with their new home a structure of beauty and utility. {{more}} He complimented the contractors for keeping the arches, which he said, fitted with the architectural idiom prevalent in Kingstown dubbed the “City of Arches”.
Dr. Gonsalves said the CLICO Financial Centre, which cost in excess of EC$14,000,000, was a substantial investment, which indicated CLICO’s commitment to St. Vincent and the Grenadines.
“I want to congratulate the leaders of CLICO and those who have been the driving forces behind this particular enterprise,” the Prime Minister emphasised.
Dr. Gonsalves spoke at length of the insurance industry’s status here.
He said that in St. Vincent and the Grenadines, the insurance market obtained its own identity 25 years ago with the passage of legislation governing the establishment of local insurance companies. The Prime Minister said it was apparent that the insurance industry needed to be rationalised, as it was evident that there were too many companies in proportion to the population and the Gross Domestic Product (GDP) in the Caribbean.
He said the rationalisation in the region would deliver to the public a wider range of products at a cheaper rate. The Prime Minister said persons would get greater coverage with low premiums.
Dr. Gonsalves outlined that even as the insurance sector expanded in several if not most of the Caribbean’s jurisdictions, the regulatory and supervisory regime for the insurance sector had been weak and needed upgrading.
The Prime Minister disclosed reasons why the Government did a new Insurance and Motor Vehicle Act last year. He stated that the Insurance Act would come into effect January 1, 2005. According to him, that would signal that, “The insurance companies must put their houses in order to meet the new regulatory regime.”
Dr. Gonsalves appealed to consumers to know the new Insurance Act.
Dr. Gonsalves said the days were gone when the consumer could depend on the goodwill of the insurance company to see about their business properly. “The State has to intervene not to own insurance companies but to regulate them in an efficacious way to protect the consumer.”
The Prime Minister outlined that the industry had to be regulated because it was not unknown that insurance companies could be used for money laundering purposes.
Mentioning weaknesses in some insurance companies, Dr. Gonsalves identified inadequate capital provisions, capital requirements not related to risk, inadequate regulations governing investments and weak laws.
Prime Minister Dr. Gonsalves disclosed that the insurance sector in St. Vincent and the Grenadines comprised 19 active short-term insurance companies, 10 active long-term insurers, three active insurance brokers and Lloyds underwriters. He added six of the 19 active short-term companies were long-term insurers, which write short-term business also.