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The problems experienced in Jamaica, in the middle of the 1990’s, when the life insurance industry and most of the banking sector collapsed led the government and regulators to examine the causes. Measures were implemented that were aimed at solving the problems associated with the life insurance industry. In the process, a number of life insurance companies were forced to merge to ensure viability. In contrast, the general insurance industry saw only one failure which was salvaged through government assistance.
The primary purpose of insurance is to provide financial support in the case of the loss of value, or life or in the financing of medical expenses as a result of the happening of certain events. The events being referred to may be perils, for example fires, hurricanes and theft, or death and ill health. Under contractual arrangements policyholders make regular payments (premiums) to insurance companies and in return the companies make a promise to make agreed financial payments to the policyholders, or their beneficiaries on the happening of the events that produce the losses being insured. Protection of the interests of policyholders is the primary consideration for the Financial Services Commission (FSC) in its role as supervisor and regulator for the insurance industry. Monitoring both local and foreign companies offering life, health and general insurance products, and the activities of:
The Insurance industry, severely affected by extensive insolvency problems in several companies in the 1990s, was brought under the control of the new Insurance Act of 2001, which has introduced stringent registration requirements for companies and intermediaries, necessary for the protection of policyholders and for restoring liquidity and viability to the sector.
