New Insurance Act seeks compliance

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Parent Category: Feb 2012

Category: Week end Feb 18th, 2012

Published on Monday, 20 February 2012 20:11

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An undisclosed number of insurance companies in Grenada have been sanctioned for being non-compliant in accordance with the new Insurance Act. Head of the Grenada Authority for the Regulation of Financial Institutions (GARFIN), Angus Smith made the announcement while speaking last week Thursday at the brand launch of Beacon Insurance Company.

Smith said sanctions for non-compliance that is a key component of the new Act is to encourage insurance companies to avoid being penalised. “We have actually started penalising some companies for non-compliance in certain areas,” he told the ceremony.

“The one thing we stress to the companies we supervise is compliance. We urge everybody to make sure, the local staff, the local management are familiar with the legislation,” he said. According to Smith the Insurance Act gives GARFIN the power to bar someone from being a manager or director of such an entity if they are determined to be not fit and proper.

The new Insurance Act, which replaced the 1973 Legislation and was passed in March 2010, is geared at significantly strengthening supervision and regulation of insurance companies in Grenada. According to Smith, capital requirements for local insurance companies increased from $500,000.00 to $2 million, and for foreign companies from $3 million to $5 million.

The new Insurance Act also covers pensions. Smith said companies could now register their pension plan for tax purposes only. “For the first time our pensions fall under the Insurance Act and are subject to supervision and regulation by GARFIN,” he remarked.

To date, GARFIN has registered about 20 pension plans. Through the new Act, quarterly reporting is required to be done by companies. Smith indicated that the Insurance Act is meant to be a harmonized piece of legislation throughout the Eastern Caribbean region.

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