$500m withdrawal from FSC to hit insurance policyholders hard, says Robinson

Opposition spokesman on finance Julian Robinson on Tuesday warned that persons who have insurance policies should brace for sharp increases owing to significant costs that have already been imposed on insurance companies by the Financial Services Commission (FSC), the body that regulates them.

Debating the Insurance (Amendment of 20th Schedule) (No.2) Regulations 2026 in Parliament, Robinson said the Government’s decision to withdraw $500 million from the FSC had imperiled the financial position of the regulatory body.

He said the FSC has made a decision to increase the fees it charges to insurance companies. This move, according to Robinson, will have serious implications for persons who take out insurance policies as they will now face increased costs.

“An insurance company that was paying a flat rate, these are real numbers, of $500,000 before, will now pay over $100 million annually, based on the change in the fee structure by the FSC,” he said.

“If you have life insurance, home insurance, if you have car insurance you are going to be faced with significant increases as a result of the decision made to withdraw the $500 million from the FSC and then for the FSC to change the way it charges these companies,” Robinson added.

According to Robinson, the country was already grappling with the problem of severe underinsurance, noting that the numbers coming out of Hurricane Melissa showed that of the affected households about five per cent of them had insurance.

“We want to encourage people to insure their homes and properties. This decision is going to push insurance premium way out of the reach of most Jamaicans,” he insisted.

Calling the Government’s move to extract $500 million from the FSC a “bad decision”, Robinson said the administration introduced this measure without sufficient consultation with members of the industry.

He urged the administration to withdraw the regulation which imposes increased fees on insurance companies if it wanted more Jamaicans to take out insurance policies.

Robinson said the Government should desist from “raiding public institutions” even as it had already pulled $11.4 billion from the National Housing Trust, $2 billion over the last two years from HEART Trust and half a billion from FSC this year.

He stressed that the implications of this was that many motorists might not be able to insure their motor vehicles while homeowners might not be able to adequately insure their properties.

Frank Witter, a state minister who piloted the regulation, said players in the insurance industry were consulted, based on information received during the deliberations of the Regulations Committee.

“A decision was taken by members of the committee on both sides that it was a straightforward issue and therefore we asked that the report be adopted,” Witter said.

In a recent interview with The Gleaner, Executive Director of the Insurance Association of Jamaica (IAJ) Everton McFarlane said players in the insurance industry were concerned about the magnitude of increase in insurance fees, in some instances as high as 100 per cent, which was approved by the Regulations Committee of Parliament.

McFarlane said while the cost of the fees would vary by companies depending on their size, insurance companies would be faced with increases ranging from 45 per cent to more than 100 per cent.

“The increases are clearly substantial, it’s high and every dollar that goes toward fees is a dollar less to invest and a dollar less to build the business,” he said.

However, McFarlane said at the time that the Government should have dialogue with the industry to ensure that the increases were done in such a way that the effects were managed so that there was no significant impact on the companies or consumers.

edmond.campbell@gleanerjm.com