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Cedric Stephens Is the FSC finally changing gear to focus more on consumers?

Raymond, one of my faithful readers, raised interesting points about my August 28 article: ‘Why the secrecy and delay in the Taneka Gardner life claim?’

He asked: Would it be ethical, legal, and consistent with public policy for Ms Gardner’s late pastor’s legal personal representatives to receive the proceeds of her insurance policy given the fact that she was killed in an event in which he was implicated while her family members (who were reportedly the originally designated beneficiaries), were left to suck salt? If that should happen, wouldn’t they be profiting from the proceeds of a crime?

Those comments reinforce my argument in that column. The insurer, despite the long delay, does not appear to be responsibly managing their interactions with Ms Gardner’s still grieving family and, more importantly, appears to be treating them unjustly. Are there any quick and effective remedies except court action?

This brings me to the matter of ISO certification. Twenty-four local government agencies have met the International Standards Organization (ISO) certification standards. These standards cover a range of activities and are developed by international experts. They apply to the making of products, managing processes, the delivery of services, and supplying of materials. ISO standards are said to be “the distilled wisdom of people with expertise in their subject matter areas and who know the needs of the organizations they represent”.

The Jamaican Government believes that by the adoption of ISO rules, the business environment and quality of service delivered in its ministries, departments, and agencies will improve. These reform measures are overdue. If my experiences with government agencies, notably the ministries of industry and commerce, agriculture, and fisheries, and even the Office of The Prime Minister, are representative of those of most citizens, I can understand why some persons resort to setting up roadblocks and burning tyres to get attention.

The Government’s expectations about the efficacy of ISO accreditation to foster change are probably correct. The National Health Fund is a government agency. Its operations meet ISO standards. Last year I became an NHF fan after a short visit to its New Kingston office. My interactions with its employees via a website and during a face-to-face visit led me to write ‘Lessons for Insurers from NHF Service delivery’ on October 16 last year. That article also cited the work that Chief Justice Bryan Sykes and members of the team had done in reducing the backlog of cases in the judicial system.

Are insurers and intermediaries seeking ISO certification in order to improve the quality of service delivered to their customers? I would like to know. I am issuing an invitation to them and intermediaries to provide me with details of what they are doing, and I will undertake to share the information with readers.

International Financial Reporting Standards (IFRS) are a set of global accounting rules that determine how transactions and other accounting events must be reported in financial statements. One rule, IFRS 17, is designed to standardise insurance accounting to improve comparability, increase transparency, and provide users with the information they need to meaningfully understand insurers’ financial position, performance, and risk exposure. The Financial Services Commission, FSC, which supervises insurance entities among other non-bank entities, says, according to a July Jamaica Observer report, “that it is working with relevant stakeholders to finalise amendments to The Insurance Act, 2001, and Regulations, for the adoption of IFRS 17”. The article also referred to market conduct regulations as though that process was part of IFRS 17.

Reading between the lines, it appears that the FSC has now finally resolved its ambivalence about being a prudential and market conduct regulator. It has emphasised the former, to the detriment of the latter since its inception two decades ago. “The purpose of prudential regulation and supervision,” according to The South African Reserve Bank, “is to ensure that financial institutions and market infrastructures operating within the financial system are inherently safe and sound.” Market conduct and consumer protection, on the other hand, are the elements of financial regulation and supervision that focus on the behaviour of financial institutions. It includes, according to a World Bank pamphlet, Market Conduct Supervision in Small Countries, “non-distortive and non-abusive business practices, information disclosure in providing services to retail consumers and financial consumer protection supervision”.

I recall that the FSC’s first executive director, Bryan Wynter, now ex-Bank of Jamaica Governor, asked me years ago to prepare a paper on the subject. It was presented to members of the insurance industry.

The FSC’s existing February 2019 Market Conduct Guidelines, which, I must confess, I welcomed with open arms, are, in my view, a joke. They do not have the force of law and are honoured in the breach. They assume that the processes involved with marketing, sale, and distribution of all insurance products and those associated with the settlement of claims are similar. Service standards are vague or missing. The premise on which the rules are built is that fair treatment of customers should be at the heart of the business models of insurers and intermediaries. It is not.

Like John the Baptist, I have been the lone voice in the wilderness that has been crying out for years for the FSC to adopt a twin-peak regulatory structure. It should practise prudential and market conduct regulation. If it had listened to the message, Ms Gardner’s family would have faced less uncertainty.

Cedric E. Stephens provides independent information and advice about the management of risks and insurance. For free information or counsel, write to: or

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