Financial Services Commission (FSC) under pressure
Philip Hamilton, Gleaner Writer
Parliament's Public Administration and Appropriations Committee (PAAC) this week took aim at the Financial Services Commission (FSC) for a proposal the regulatory body made that might affect insurance costs.
The parliamentary oversight committee raised concerns over what it said were faulty recommendations requiring the insurance industry to investigate clients for money-laundering attempts.
The recommendations, which are linked to the 2007 Proceeds of Crime Act, could trigger a hike in general-insurance rates.
Last year, insurance companies introduced a questionnaire requiring customers to disclose the source of funds used for paying motor vehicle and home insurance premiums.
increase in premiums
During Wednesday's committee meeting at Gordon House, PAAC Chairman, Dr Wykeham McNeill, disclosed that general-insurance companies had complained that increased administrative work and costs had left them no choice but to increase insurance premiums.
"For the increased cost that we're going to have to pay on the premiums, is it that you feel the information you're going to get from the questionnaire is going to assist you?" McNeill questioned officials from the FSC who appeared before the committee.
FSC representatives acknowledged that the insurance industry was in fact seeking to verify clients' legitimacy through home addresses, as well as other information submitted.
But FSC's general counsel, Loretta Reid-Pitt, said it was the insurance industry that had decided on the direction it wanted to take on a position paper submitted to the FSC.