Bahamas Insurance Firms May Need Approval To Raise Rates

by Amanda Banks, Tax-News.com, London

31 January 2005

Domestic insurers in the Bahamas may have to seek approval from the Insurance Commission before they can increase premium rates, the Nassau Guardian has reported.

The news emerged after a presentation by Minister of Financial Services and Investment, Allyson Maynard-Gibson, during a debate on the Domestic Insurance Act in the House of Assembly last week, in which she revealed that the new Commission could have an influence over the level of insurance premiums.

“It will not be possible in the future for insurers to make changes in policy wordings or premium rates without having to justify proposed changes to the Commission," she informed lawmakers during the debate.

According to the Guardian, insurers warn that such a system, if introduced in the Bahamas, would require a level of actuarial support that would severely impact on the cost of doing business locally.

"If we are tied to a system where it becomes a political issue I think that would have the impact of driving away some of the support from The Bahamas because it becomes too cumbersome a market place to operate in," cautioned Patrick Ward, the President of Bahamas First General Insurance.

However, as such a proposal was never discussed during working group sessions, Mr Ward believes that it is unlikely to be approved.

"My understanding is that (the proposal) relates to a much more narrowly defined product line than might have been implied in the minister's statement. But I will leave it to her office and the registrar to clarify further the implications of that statement," he explained.

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