Risk-based Supervision Concept Paper

Introduction

In the mid 1990’s several financial organisations were faced with liquidity/solvency challenges resulting in
the Government of Jamaica, creating a new regulatory regime. The government’s response was centered on
upgrading the regulatory framework, by improving legislation and strengthening the institutional capacity to meet the new supervisory and regulatory challenges. This was achieved, in part, by the creation of the Financial Services Commission (“FSC”), an integrated financial services regulator.

 

The FSC came into existence on August 2, 2001 by virtue of the Financial Services Commission Act 2001 (the “FSC Act”), to replace the Office of the Superintendent of Insurance and Unit Trusts and the Securities Commission. In 2004, the FSC was also charged with providing regulatory oversight for the private pensions industry. Accordingly, the FSC has purview over the insurance, securities and private pensions industries. As at December 31, 2019, the industries regulated by the FSC collectively represented 47.96% of financial sector assets, broken down as follows: insurance – 11.59%, pensions
– 18.86%, securities – 17.51%.


The objectives and mandate of the FSC, as outlined in Section 6 of the FSC Act, are summarised as follows:


1. Promote stability and public confidence in the operations of financial institutions;
2. Promote public understanding of the operation of prescribed financial institutions;
3. Promote the adoption of procedures designed to control and manage risk, for use by the management, boards of directors and trustees of such institutions;
4. Promote the modernization of financial services with a view to the adoption and maintenance of international standards of competence, efficiency and competitiveness.