St. George’s, July 27, 2011 (GIS) – Parliament has passed an insurance amendment act 2011 which seeks to change certain provisions of the Insurance Act 2010.

Finance Minister Nazim Burke said that in the wake of the collapse of financial institutions like British American and CLICO, governments in the Caribbean have been concerned about the environment in which insurance companies and other non-bank financial institutions operate.

“I am proud to say that Grenada has been among the countries out front in enacting the new legislation  with respect to insurance companies,’’ the Finance Minister told parliament while tabling the motion for the Insurance Amendment Act 2011.

He reminded his colleagues in the House of Representatives that insurance legislation passed last year covered issues such as “the statutory pledges that are to be complied with, the fees that are to be paid by insurance companies, and the circumstances under which an insurance company may no longer be allowed to engage in business in this country.”

Mr. Burke explained that certain “minor changes’’ are now necessary in to improve the law, and to address concerns related to lack of supervisory and regulatory arrangements.

He added that many of the non-bank financial institutions pose a systematic risk to the financial system, because of the blurring of distinctions between banks and non-bank financial institutions.

The amendment to the act broadens the definition of “local company,’’ to include companies that are in incorporated not only in Grenada, but also incorporated in the Eastern Caribbean Currency Union.

“This broadening on the definition,’’ said Finance Minister Burke, “is in keeping with the drive by the Eastern Caribbean Currency Union to create one single financial space in the OECS sub-region. It will treat all OECS companies the same.’’

The amended law will require that the principal representative of a foreign insurance company to be a resident of Grenada instead of a citizen.