Update on Regulatory Changes in the Eastern Caribbean Currency Union

Transcription

1 Update on Regulatory Changes in the Eastern Caribbean Currency Union 24th Annual CAA Conference Hilton Barbados Resort Bridgetown, Barbados December 3 to December 5, 2014

2 Update on Legislative Changes in the Eastern Caribbean Currency Union Derek A.C. St. Rose Financial Services Regulatory Commission St. John s Antigua & Barbuda derek.st.rose@fsrc.gov.ag 24 November 2014

3 Outline Background Legislative Changes Antigua & Barbuda St. Kitts-Nevis Grenada St. Vincent and The Grenadines Anguilla Dominica ECFSRC/ECCU Insurance Act ECFSRC ECCU Insurance Act ECCU Insurance Act Important/Main Features 3

4 Background The Eastern Caribbean Currency Union (ECCU) comprises eight (8) member countries, namely: Anguilla, Antigua & Barbuda, Dominica, Grenada, Montserrat, St. Kitts-Nevis, St. Lucia and St. Vincent and The Grenadines. The ECCU is a development of the Organisation of Eastern Caribbean States (OECS) and is supervised by the Eastern Caribbean Central Bank (ECCB). The members are associated by virtue of the use of the same common currency, the Eastern Caribbean Dollar (XCD) and their commercial banks are regulated by the ECCB. 4

5 Background There has traditionally been very little coordination among ECCU members on changes in or introduction of financial services legislation. Although attempts have been made in the past at unified legislation, the member countries generally pursue their own agendas. In recent times there has been dialogue among the various member regulatory bodies in an effort to collaborate on tackling common legislative and regulatory issues. The most recent and significant initiative is the Eastern Caribbean Currency Union Insurance Act (ECCU Insurance Act) and the Eastern Caribbean Financial Services Regulatory Commission (ECFSRC). 5

6 Legislative Changes All ECCU Member Financial Regulatory Authorities were requested to submit an update on legislative initiatives in their countries over the last year and submissions were received from: St. Kitts-Nevis; Grenada; St. Vincent and The Grenadines; Anguilla; St. Lucia. Dominica 6

7 Legislative Changes Antigua & Barbuda International Business Companies (IBC) Act was revised to provide for non-licensed entities to be required to keep financial records; New (draft) IBC Act is being reviewed with a view to having the law in place by end of the 1 st quarter of 2015; ECCU Insurance Act and the ECFSRC Act is under consideration (all Territories). 7

8 Legislative Changes St. Kitts-Nevis No legislative changes; ECCU Insurance Act and the ECFSRC Act is under consideration (all Territories). 8

9 Legislative Changes Grenada Insurance Act Amended to require significant shareholders to be fit and proper; Regulations governing Admissible Assets and Valuation of Assets passed; ECCU Insurance Act and the ECFSRC Act is under consideration (all Territories). 9

10 Legislative Changes St. Vincent and The Grenadines Insurance Regulations issued under Domestic Insurance Act specific to the electricity services - Insurance (St. Vincent Electricity Services Ltd.) Captive Insurance Fund 2014; The International Business Companies (Amendment & Consolidation) Act, International Trusts Act, Limited Liability Act and the Companies Act - were amended in June 2014 by the Financial Laws (Miscellaneous Amendments) Act, to address deficiencies identified by both the CFATF and OECD. 10

11 Legislative Changes St. Vincent and The Grenadines Mutual Fund Bill currently in final draft stage and is expected to be passed by the end of 2015.; ECCU Insurance Act and the ECFSRC Act is under consideration (all Territories). 11

12 Legislative Changes Anguilla Financial Services Commission Act was amended in September 2013 to meet recommendations from CFATF; Amendments to the Insurance Act/Regulations passed by Executive Council on 20 November 2014 to increase fees; Amendments to the Money Services Business Act enacted in October 2014 to meet recommendations from CFATF; AML and TF Regulations 2013 introduced, AML and TF Code enacted, Proceeds of Crime Act Regulations; ECCU Insurance Act and the ECFSRC Act is under consideration (all Territories). 12

13 Legislative Changes St. Lucia Amendment to Insurance Act in July of 2013 facilitated investment of 20% of Insurance Fund Assets outside CARICOM. New Cooperative Societies Bill is at an advanced stage; Amendment to Money Services Business Act to include provisions for Micro-Lending (within next 3 months); Amendment to the Insurance Premium Tax Act to change the applicable premium tax rates for general and life insurance business (effect early 2015); Amendment to Insurance Act - annual license fee structure (to take effect January 2015). 13

14 Legislative Changes St. Lucia (Cont d). ECCU Insurance Act and the ECFSRC Act is under consideration (all Territories). 14

15 Legislative Changes Dominica Amendments made to Proceeds of Crime Act and associated legislation - to meet CFATF Recommendations; Financial Services Unit Act under consideration to give FSU powers in the absence of Director of FSU; ECCU Insurance Act and the ECFSRC Act is under consideration (all Territories). 15

16 Legislative Changes ECCU Insurance Act and ECFSRC Initiative started largely because of the CLICO/BAICO debacle; NAIC visited and model used to design way forward; Several options considered but uniform law and super regulator chosen as option going forward; Super regulator to regulate Insurance and Pension licensees; New Act to govern insurance and pension business in all territories; 16

17 Legislative Changes ECCU Insurance Act and ECFSRC Non-bank financial institutions to be pulled in subsequently; 17

18 ECFSRC/ECCU Insurance Act ECFSRC Proposed new super regulator for all insurance and nonbank business in ECCU; To be headquartered in one of the ECCU member states; To be self funded; Replaces the various SRUs for insurance and non-banks regulation and supervision; To immediately on commencement regulate Insurance and pensions, with other non-bank regulation subsequently. 18

19 ECFSRC/ECCU Insurance Act ECCU Insurance Act To cover Insurance and Pensions; Replaces all Domestic Insurance and Pension legislation; To cover non-bank financial services regulation subsequently; 19

20 ECFSRC/ECCU Insurance Act ECCU Insurance Act/Important Main Features The ECCU Insurance Act will be the sole piece of legislation governing Insurance and Pension business and seeks to make the member territories more compliant with IAIS Insurance Core Principles. Among the main new features of the Act are: A general updating and strengthening of provisions; Increase in Minimum Capital Requirements (3 and 7 $M for Gen. and L/Term respectively and net requirement); Tighter requirements for lodgment of F/S and Returns; 20

21 ECFSRC/ECCU Insurance Act ECCU Insurance Act/Important Main Features (cont d) Definition and provision of officer; Requirements for qualification as an actuary (requirement of two years from commencement to join CAA); Long Term insurers require to have appointed actuary; Consumer Protection provisions; Shareholder limits provisions; Provisions on Reinsurers; Prohibitions against borrowing/pledging; 21

22 ECFSRC/ECCU Insurance Act ECCU Insurance Act/Important Main Features (cont d) Prohibitions on dealing with structured products; Provisions on auditors terms, independence, etc; Audit Committee provisions; Complaints provisions (officer, investigations, etc.); Commission powers (examinations, investigations, enforcement, directions, interventions and hearings); Insurers Code of Conduct; Offences and administrative fines; 22

23 ECFSRC/ECCU Insurance Act ECCU Insurance Act Important/Main Features (cont d) Statutory Funds; Minimum Solvency Requirements; Penalties; Association of Underwriters; Captive Insurance; Group Insurance. 23

24 THANK YOU! 24

25 Derek A.C. St. Rose Financial Services Regulatory Commission St. John s Antigua & Barbuda derek.st.rose@fsrc.gov.ag 25