Cedric Stephens | Why bad insurance service persists

The title of this newspaper’s May 7 editorial, ‘Hear from the Chinese Garage’, was ambiguous. The text suggested that local service providers, policymakers, regulators, and others should study the strategies that the foreign garage owners and mechanics had devised to meet increasing consumer demand for their services.

“The recent closure of the car repair garage at Ferry, St Catherine,” the newspaper said, “was a straightforward case of regulatory enforcement”.

The editorial also argued that “where poor customer service, long wait times, and inconsistent quality are common in many sectors, the emergence of a workshop that diagnosed problems quickly, communicated clearly, and charged fairly was a breath of fresh air. Therein, this business, during its scant few weeks of operation, highlighted a national weakness in productivity. It demonstrated, too, that Jamaican consumers are ready to embrace productivity when they encounter it”.

It was unclear whether the advice implied in the headline was an indirect criticism of all local service providers. Was there low-key praise (or criticism) for the Ministry of Labour and Social Security’s action to shutter the repair garage?

Services offered by the Jamaica Public Service Company, the National Health Fund, and the Office of Utilities Regulation must be included in any discussion about the delivery of customer service. These entities which are managed and staffed by locals are also models of ‘efficiency … and overall excellent service’.

The STAR recently offered an important example of tardy regulatory enforcement that occurred in October 2023. The Kingston and St Andrew Municipal Corporation (KSAMC) and the Public Health Department acted against a popular street side eatery that sold boiled crab, soup and roast corn. It is called Crab Circle. The facility was temporarily shut down, vendors were trained in food handling and sanitation, and the area cleaned.

These actions occurred after a vendor was seen performing an unsanitary act. She was banned, arrested and fined $250,000 for breaching regulations. The vendor paid the fine, underwent training at the HEART/NSTA Trust, obtained a food handler’s permit, and is now back at Crab Circle.

the KSAMC’s and the Public Health Department’s enforcement measures were anything but clear-cut and quick. The eatery had been in existence for four decades. No information is currently available about whether vendors are still complying with the regulatory standards. Was it a fluke that the KSAMC and the Public Health Department decided to enforce the regulations after being missing in action for four decades?

MS, a St Ann motorist, was involved in a collision with another vehicle a few weeks after the regulatory breaches at Crab Circle were made public. The Jamaica Observer trumpeted in a five-column headline last Sunday that the claim had been settled. Big deal! An insurer’s representative tendered apologies in a March 28, 2025 email to the newspaper and the claimant “for the delay in settlement (and assured them that) we continue work towards improving our service delivery”. Is this a credible promise given the history of the claim and in the absence of supervisory intervention?

The motorist, newspaper, insurers, and intermediary behaved – like the vendors at Crab Circle pre-2023 – as though there were no laws or regulations governing insurance transactions.

The insurance industry must operate in accordance with a law that was passed nearly 25 years ago. There are specific rules that prescribe how claims should be handled. Surprisingly, even though the claim for MS was not paid until April-May 2025, there was absolutely no reference in the article about regulatory compliance or to the regulator, the Financial Services Commission (FSC).

The FSC’s latest rules were enacted and gazetted on December 31, 2022.

Regulation 142A(3)(d) of the Insurance (Amendment) Regulations 2022 states that every insurer and insurance intermediary shall develop and implement measures that ensure “policyholder’s claims are settled fairly and payments made without undue delay”.

Regulation 142E(1) imposes a duty on insurers and intermediaries to provide customers in writing with accurate information about the procedures for the investigation, adjustment, and settlement of claims, including the processing of claims.

Regulation 142F(1) and (2) imposes a fine “not exceeding $3 million or a term of imprisonment not exceeding one year” where an insurer or intermediary fails to provide information “required” under the regulations.

Neither Regulation 142A(3)(d) nor Regulation 142E(1)(e) and (f) appear to have been complied with in relation to the claim submitted by MS. Further, I have seen no evidence during the past 24 months to suggest that any insurer or intermediary has ever been fined for non-compliance with Regulation 142F(1) and (2).

The insurers and the intermediary, accidentally or otherwise, also ignored Regulation 142O(2)(3). It reads: Where insurers fail to agree which of them is responsible to make payment in settlement of a proven claim … within 30 days on which the claim was proved, the insurers shall refer the matter to mediation and the determination of the mediator shall be final.

The newspaper article said, on August 16, 2024, that one insurer reported that liability was in dispute with the other insurer. The dispute was not resolved until November 24, more than 60 days after the deadline imposed by the rule. It is unclear whether the payment that was made to MS included 60 days’ interest calculated on the amount of the claim.

The ideas behind this article were sparked by this newspaper comments about the Chinese garage, customer service generally and specifically, the non-enforcement of regulations that benefit insurance consumers cited in the preceding paragraphs.

I hope that the new FSC bosses at Nethersole Place will take note of these sins of omission when the proposed twin-peaks regulatory model is being implemented.

Cedric E. Stephens provides independent information and advice about the management of risks and insurance. For free information or counsel, write to: aegis@flowja.com or business@gleanerjm.com