To further strengthen the financial stability of the pension and insurance sectors in the country, continued supervision will be employed to ensure resilience in order to withstand any adverse shocks.
This was detailed by Governor of the Bank of Guyana (BoG) Dr Gobind Ganga who was outlining the Bank’s projections for 2017 regarding those two critical sectors.
Insurance and pensions protect the poor against vulnerability and livelihood risks, allowing for an increase income and consumption and an accumulation of assets. Proposed insurance and pension laws will increase the solvency, governance, and depth of both sectors.
Dr Ganga said there will be continued dialogue with participants of both sectors to ensure they are aware of the requirements of the new regulatory regime.
Currently, discussions are ongoing with stakeholders on the drafting of a new Pensions Act and consultations were held with trade unions in this regard.
Dr Ganga said the engagement with stakeholders will continue next year with the hope of its passage of the Pensions Act coming to fruition before the end of 2017.
He explained that the pension sector remained solvent in 2016, with an average solvency ratio of 132.32 per cent.
Regarding insurance, Dr Ganga said the sector consisted of 16 insurance companies at the end of September 2016.
These companies include six life insurers offering general life, health, annuities and pension’s products, and 11 non-life insurers providing coverage for accidents and liabilities; auto, marine and aviation; and fire.
The Governor disclosed that the insurance sector accounted for approximately six per cent of the total financial assets and 25 per cent of nonbank assets as at September 2016.
“The sector was adequately capitalised as both the long-term and general insurance sector’s assets exceeded their respective solvency requirements in keeping with the Insurance Act 1998.” The insurance sector’s assets accounted for 8.3 per cent of the country’s Gross Domestic Product (GDP).
Dr Ganga also noted that the drafting of the attendant regulations to the new Insurance Act is presently in its final stages of preparation.
The Insurance Act 2016, which was passed in Parliament on June 30 and later assented to by President David Granger, fortifies a regulatory role for the Bank of Guyana.
For the first time, BoG can impose fines and penalties for failure to comply with directives and for other offences. (Guyana Times)