Overview
Insurance is a financial product that helps individuals and corporations (policyholders) recover from adverse events and is therefore a form of financial protection. Companies providing insurance cover in Barbados may operate to insure or reinsure (i) the risks of third parties e.g. the general public or (ii) the risks of their shareholders/parent companies and related entities.
Insurance companies provide insurance cover may undertake general insurance business e.g. motor insurance, residential insurance, commercial property businesses; liability insurance such as public liability or employers liability, accident and health insurance etc. They may undertake long-term insurance business e.g. life insurance; or both general insurance and long-term insurance as composite insurers.
The insurance market also comprises insurance intermediaries who provide certain services within the sector. These entities are brokers, agents, salespersons, loss assessors, loss adjusters, and insurance surveyors. In addition to insurance companies and intermediaries, other service providers and insurance related entities known as insurance management companies; (insurance) holding companies; and associations of underwriters are required to be licensed with the FSC.
Insurance companies and the other entities identified above are required to be registered and licenced pursuant to the Financial Services Commission Act 2010-21 and the Insurance Act, Cap. 310. The Financial Services Commission is responsible for supervising and regulating the insurance sector.
Regulatory and Supervisory Functions
The FSC supervises the business activities associated with insurance companies, insurance intermediaries and other insurance service providers, including insurance managers and loss adjustors, in accordance with its risk-based supervisory framework. The FSC’s supervisory and regulatory activities involve offsite analysis and onsite inspections of the entities in the insurance sector. Amongst other things the FSC:
- Registers and licenses corporate bodies and individuals seeking to undertake insurance activities.
- Monitors the solvency, capital and financial condition of insurance companies to determine whether they are able to meet their obligations and to institute measures where there are signs of weakness
- Assesses the effectiveness of the risk management programmes of insurance companies and other insurance entities to ensure that they are undertaking business in a sound manner and that policyholders are treated fairly
- Establishes standards for strengthening entities
- Reviews and assesses amalgamations, mergers or other forms of business combinations involving insurance companies, transfers of shares
- Reviews and assesses various other types of applications submitted for consideration, including changes to the class of licence, termination or novation of business, re-domiciliation of insurance companies, changes to the class of insurance business
- Monitors entities’ compliance with legislative and regulatory requirements
- Initiates enforcement action where necessary, including suspension and revocation of licences.
Stakeholder Engagement
The FSC actively liaises with and engages with stakeholders in carrying out its mandate to supervise the insurance sector. The FSC hosts periodic industry sessions with regulated entities and engages domestic industry representative bodies, including the General Insurance Association of Barbados, the Insurance Institute of Barbados, and the Barbados Association of Insurance and Financial Advisors. As a member of the Caribbean Association of Insurance Regulators (CAIR), Barbados is a signatory to the CAIR MMoU for information exchange and cooperation and has been a supportive member of the CAIR executive. Internationally, the FSC is a member of the Group of International Insurance Centre Supervisors and the Insurance Association of Insurance Supervisors.
