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Posted on 11/16/2019 in Business

Insurance Companies & Regulations in Jamaica

Insurance Companies & Regulations in Jamaica

For a long time, the insurance companies in Jamaica had a field day when engaging persons to take out policies. The average Jamaican basically understood taking out an Insurance Policy was for after death, which the beneficiary would get the sum total of the policies’ worth. Some were taken out for after retirement, so you would have some form of tangible income. 

Today, Insurance companies are being scrutinized by the Government, who are the regulators of such bodies. They are being forced to ensure policyholders or persons approached to buy a policy, understands the detailed or fine prints in the document. The FSC or Financial Services Commission is the watch-dogs for these Insurance companies. They ensure the policyholders’ interests are protected in every way.

Amendments to the Insurance Regulations

In 2016 after 15 years of scrutiny, the Government passed into law by amending the Insurance Act requiring insurance companies to publish quarterly reports. The amended act also requires them to ensure a more understandable average clause policy is made available to policyholders. It states the average clause policy must be made clearer for policyholders and prospective policyholders to understand. No longer will policyholders be left in the dark as to what they are paying for.

“The average clause refers to clauses in policy requiring that, where assets are insured for less than their full value, the insured is required to bear a proportion of any loss.” As published in the Gleaner Saturday, January 16, 2016.

“It enables persons who buy insurance to know what they are buying and how the average clause works, and why it is important for them to insure their properties for their full value if they want to get full indemnification," Golding added. (As Published in the Gleaner Saturday, January 16, 2016)

The then Opposition Senator Marlene Malahoo Forte said that the average clause has "brought a lot of injustice for persons who buy insurance" and said that the Government should have done more in the law to protect the consumers. (As Published in the Gleaner Saturday, January 16, 2016)

Also, the then Government Senator Lambert Brown said he too does not like the average clause but said that the requirement for newspaper publication and for details to be set out on the front page of the policy will go towards greater consumer protection. (As Published in the Gleaner Saturday, January 16, 2016)

The FSC or Financial Services Commission has been given the task to ensure the guidelines are put in place so consumers begin to reap the benefits. It is also to ensure Insurance Companies as well as publishing the average clause in the newspaper they should publish the notice on the websites of their business. 

Property Insurance Rates in Jamaica

As it relates to Jamaicans insuring their properties, the percentage is very low. First World countries see the value in home and property insurance. They realize in the event of a disaster, whether hurricane, storm, tornado or fire, there will be some monies available for them to rebuild. The IAJ or Insurance Association of Jamaica in an interview with its President Mr. Peter Levy by Mr. Mark Wignal has conclusive figures to back up this claim. Here is a clip of portions of that interview: https://www.youtube.com/watch?v=nveiiVk5vLg

The financial strain many Jamaicans live under daily, weekly and monthly, has caused them to make decisions against property and home insurance. They opt to deal with, school, food and other every day need. For a homeowner, paying the mortgage to ensure they have a roof over their head is more important than insurance. This is not to say when a disaster occurs they don’t worry. The concerns of rebuilding and refurnishing weigh heavily on them. Thus, many homeowners if they do insure their property, will settle for partial insurance, with the understanding they are only going to be able to rebuild on a smaller scale. 

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