DR NEIL GOSINE
I WRITE this article from the point of view of the insurance brokerage industry and the increasingly more back-breaking regulatory rules.
One of the core functions of the Central Bank of TT (CBTT) is supervision of the insurance industry. The bank tries to maintain a stable financial system by minimising the potential for losses by depositors, policyholders and pension plan members, and of course this is commendable.
The responsibility for maintaining this mandate lies with the Financial Institution Supervision Department (FISD) within the bank. And encouraging stability of the financial system is, of course, one of the key directives of the bank.
Section 65(1) of the Insurance Act bestows on the Central Bank the authority to "at any time intervene in the affairs of a company registered under this act to carry on insurance business." It allows the governor, if he is not satisfied that the company is operating properly, to intervene, as detailed in section 65(2).
All insurance companies and insurance brokers are regulated by the Central Bank. The brokers pinpoint and organise adequate insurance cover for commercial organisations and private clients. The brokers work together with their clients and insurance companies, sourcing from the companies the best insurance-cover deal for their clients.
Over the last ten years the CBTT has clearly lost its way and has become omnipotent in its actions towards brokers – a force on to itself, in my opinion.
This is based on the bank's narrow-minded thoughts in over-regulating brokers and stems from the manner in which it views the brokers fraternity, the way the CBTT is funded by taxpayers and how it spends taxpayers' funds.
For example, just look at the condition of its headquarters, the Twin Towers. The CBTT tower is a rigid, brittle place, anointed with original pieces of art and armed with a battery of new cars in the private car park, while their sister tower is rundown, scruffy at best, crowded and dingy.
This demonstrates the CBTT's divergence of responsibility.
One function as a regulator for financial institutions is to regulate. Not only to give "scorching hot-water" mandates all the time to the companies, but to also help the industry grow and foster a healthier environment in the brokerage sector by delivering "cooling water" to allow business to grow under its tenure.
In our industry we are continually bombarded by more and more rules, and ethics of course play a large part at all levels, especially at the individual and business levels, as the cornerstone of our industry is “utmost good faith.” However, if the companies cannot afford to implement all the regulations imposed on them we will see the smaller to mid-size brokerage companies failing and closing up shop.
The insurance industry, especially the brokerage fraternity, is finding it difficult to cope due to burdensome and onerous regulations imposed by the Central Bank.
What is required at this stage is bringing all parties together, like what other international re
