Thu | Apr 2, 2020

Cedric Stephens | The insurance bureaucracy

Published:Sunday | August 26, 2018 | 12:00 AM

Sunday Gleaner writer Erica Virtue's front-page August 5 article, 'Break-up', offers an example of how organisations get things wrong.

Policies are often executed willy-nilly. Actions are sometimes taken without regard for their effects.

The suffragan bishop of Kingston - a senior official in the hierarchy of the Anglican Church - was suddenly stripped of his right to officiate at weddings. He was a marriage officer of 45 years' standing. A Registrar General's Department (RGD), attendant seized the bishop's marriage register, presumably as part of a policy decision.

Little did I know when I read the report about his RGD experience that the insurance bureaucracy would have given me something to write about three weeks later.

The car insurance fell due for renewal in late July. I discovered that the insurers wanted written confirmation - signed by a justice of the peace - in the absence of a utility bill or some other document with my wife's name and address, that we share the same bed at nights! Why? Because my wife and I are named as policyholders in the policy. The utility bills are in my name. A declaration from me that we are husband and wife and live at the same address will not pass muster.

The insurer is a financial institution whose operations are governed by the Money Laundering Act, 1998. It is, among other things, required to 'know' its customers.

Apparently, it does not 'know' my wife in accordance with the regulations of the act if it cannot prove on paper that she and I reside under the same roof.

The irony is that if the person who is legally my wife and I were in a common-law relationship, I could avoid the hassle. I would simply register the vehicle in my name and declare her to be a regular driver.

Because common-law relationships are not necessarily founded on the 'till death do us part' oath, I could easily substitute the name of another partner as an authorised driver as and when needed. Or, if I had the funds, I would buy and register another car in my name and give it to her to drive. Is holy matrimony no longer an honourable estate?

Copies of the driver's licences, taxpayer registration numbers and certificates of fitness and registration in the names of my wife and me are lodged with the insurer. Its actions can be interpreted that it does not 'know' my wife in the absence of a utility bill or some other document that provides definitive proof that we reside at the same address. We have been customers of this institution for over 10 years.

We have had to complete a four-page, 25-point form and disclose, among other things, our names, address, dates of birth, profession or occupation, and health status and sign a declaration to the effect that we have made a complete disclosure and not withheld any material information to be considered for insurance.

If this was not enough, by signing the form, we agree to authorise the insurers to share the information with other insurance companies, the police, the Island Traffic Authority and other entities. Bureaucracy has taken over completely. No wonder the need for a data protection law.

The customer service ambassador at the insurance company suggests that the regulator Financial Services Commission (FSC) is to blame. When FSC employees conduct on-site examinations, the insurer will be hauled over the coals if it fails to comply with Know Your Customer or regulations enacted under the law. For example, it must provide proof in black and white that policyholders like my wife and me are living together under the same roof.

Should I start a fight with the bureaucracy? Features of bureaucracies include written and inflexible rules, regulations, and procedures, and impersonal relationships. Once instituted, bureaucracies are very difficult to confront or change.

The Bank of Jamaica's 244-page Guidance Notes on The Detection and Prevention and Terrorist Financing Activities 2016 booklet sets out in detail the rules, regulations and procedures that financial institutions like our insurer must comply with if they want to comply with the money laundering law. After glancing through a few of its pages, I decided that it would be futile to try to put up a fight that I will lose. It will be much easier to make a declaration before a justice of the peace.

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