##ntial norms and regulations. the finsac head also blamed the crisis on jamaica ’ s failure to adequately regulate and supervise the financial sector. he noted, in particular, that the office of the superintendent of insurance, was not adequately staffed and as a department within the ministry of finance did not appear to have the stature needed to deal “ at eye level ” with the moguls of the insurance industry. this was the jamaican situation in the 1990s. it may not be our present circumstance, but let ’ s be frank, we have our own skeletons and we should learn from the jamaican experience and seek to put our house in order. in the context of the integrated supervision project conducted by the lawrie savage group, diagnostic studies on several insurance companies were conducted. the data obtained from these studies, as well as information from the office of the supervisor of insurance, suggest that while several companies operate in conformity with the statutory requirements, there are too many cases, similar to the jamaican example, where the prudential norms and regulatory requirements are flouted. the evidence suggests that there are far too many cases of chronic statutory fund deficits, late filing of returns, inadequate reinsurance and other areas of non - compliance. the diagnostic studies also indicate that the investment strategy of some companies requires stricter regulatory attention, in part because of limited portfolio diversification and related party transactions. the latest insurance industry report makes reference to the need for companies to upgrade corporate governance and risk management structures. it also identifies market conduct in the industry as another matter of concern. in this regard, there are clearly too many instances of inadequate and delayed settlement of legitimate claims of policyholders as well as questionable, if not, unfair and deceptive marketing practices. the capacity of intermediaries to competently fulfill their role is also an issue that reportedly comes up with some frequency. specifically, there is a perception that the training of intermediaries does not always keep pace with the evolution of products offered by some companies. these are but some of the issues that call for stronger regulation and more focused supervision. and so, what are we doing? as you know, cabinet has approved that the supervision of insurance companies and pension funds be integrated with that of banking institutions under the authority of the existing bank inspection department of the central bank. the legislation to effect this transfer is currently being finalized and is expected to be presented to parliament by the end of july or early august. in the meantime preparations for the transfer are proceeding apace. internal

need to respond constructively to changing conditions ; this could mean more mergers, more product innovation and the taking on of new risks. well - managed institutions in strong financial condition should have great freedom. the central bank will give weak companies time to manage themselves back to financial health and will also develop appropriate exit strategies for those which can no longer be viable. i invite the stakeholders in the industry - attic, ttii, the brokers association - to work with the central bank to meet these objectives. it ’ s in all our interest to have strong and effective regulation that meets international standards. stakeholders can and should bring peer pressure to bear on companies that do not play by the rules or flaunt best practices, since a few non - compliant operations can present industry - wide risks or even threaten the stability of the financial system. thanks again for inviting me.