The Office of the Commissioner of Insurance is celebrating five years of regulating insurance companies.
The Government Information Agency (GINA) quoted Commissioner of Insurance, Maria van Beek, as saying that the regulatory body ensures that insurance companies, which provide the important social service of protection, “operate prudently and with sound governance. History has shown that regulation can help prevent losses by mandating a certain minimum standard and prudential approach.”
The OCI, a government entity created by the Insurance Act of 1998, which supervises insurance companies and intermediaries, as well as pension plans, has been working in this area to ensure that the appropriate regulatory framework is in place to protect consumers. Previous regulators of the industry functioned on a smaller scale, and operated from the Ministry of Finance. The Act was passed in December 1998 after government recognized the need to strengthen supervision of Guyana’s financial institutions. However the OCI was not formed until December 2002 shortly after van Beek’s appointment to head the OCI.
In addition to the analysis of financial information which it carries on throughout the year, the OCI has worked at improving its capacity to enforce compliance. It has a team dedicated to reviewing financial information as it is critical that insurance companies have sufficient money to honour their financial commitments as well as to continue to write more businesses and proceed with their business plans.
Earlier in the year the OCI introduced an on-site inspection programme for insurance companies to increase interaction between the regulator and the regulated entity which is seen as critical for successful supervision. The intention is to conduct inspections on each insurance company at least once every five years. The OCI will, however, have more frequent contact with some companies and not others “as one of the biggest advantages of our supervisory programme is that we [are] able to better identify those that pose greater potential public risk. We will prioritise our supervision according to our risk assessments,” van Beek said.
According to the commissioner, the on-site inspections have surpassed expectations and are proving to be an invaluable tool in the supervisory programme. She said the programme suffered recently when the officer in charge of the on-site inspection programme, the Assistant Commissioner (Risk and Operations) submitted his resignation. However, one full inspection has been completed and the team is finishing off the second which will meet this year’s targets.
The OCI also assisted the finance minister in the drafting and passage of the first insurance regulations, the Insurance (Company Registration) Regulations 2007 and Insurance (Company Accounts, Forms and Documents) Regulations 2007. It also plays an important role in the operation of the Insurance Arbitration Board whose functions include the settlement of disputes between policyholders and companies and brokers. The Board operates throughout the year and continues to offer effective and affordable service to policyholders. This can only serve to strengthen the reputation of the industry as well as introduce and maintain a certain standard of practice.
“Right now we are in the middle of analysing all the financial information submitted by insurance companies. Concurrently the compliance section is finalising its compliance report for 2007. These will be completed by the end of December. The results of these two activities will assist us in prioritising our work for next year,” the release said. GINA also said after the gazetting of the regulations, work began on drafting more which should be completed before the end of the year. Additionally, work is ongoing on reviewing the Act and making some critical amendments. The OCI has produced annual reports and audited financial statements for the five years following the beginning of the Act. It has also been instrumental in the passage of the first set of insurance regulations and it has accomplished this at very little cost to the taxpayer and with the full co-operation of the industry.