Superintendent (The Insurance Commission of The Bahamas)

The first things that an investor looks for prior to investing in a foreign country are a trustworthy lawyer, bank and insurance company. What does the Bahamian financial system offer to assure investors that they are coming in to a country with a solid financial sector and within it a reliable insurance industry?

The Bahamas is a well-regulated jurisdiction in all of the financial sectors; the Central Bank is certainly well-regarded and long-standing, the Securities Commission has been in existence for more than 20 years, The Insurance Commission is relatively young. We were established in 2009 under the new Insurance Act promulgated in that year. Prior to the establishment of the Commission, the Registrar of Insurance was a department of the Ministry of Finance; we now have an independent body, which is much more focused on supervision, ensuring that the prudential requirements of companies are met to ensure safety and soundness, and protecting the policyholders. So I think over the last five years we have done quite a significant improvement in the robustness of the supervision of the insurance sector in The Bahamas.

Together with tourism, the financial services sector is the backbone of the Bahamian economy. In recent times, however, tougher international regulations such as FACTA are impacting the jurisdiction’s value proposition in this area. In your opinion, how is the insurance sector adapting in order to remain competitive and relevant?

In The Bahamas we have two distinct sectors in insurance: domestic and external. Our domestic sector is quite robust and mature for the size of our population. I think that the insurance contributes about 8-9% of the GDP so it’s quite significant in terms of the overall economy. We have been developing the external market, and over the last three years we have seen significant growth in our captive insurance market especially when it comes to cell captives. We have seen significant growth of around 30% in each of the last two years. The thing with external insurance in particular, its growth depends to a large extent on what is happening in other jurisdictions. We have captives from the US and Europe and we have both on the life and general companies, so it really depends on what is going on in other economies and people’s attitude to risk and wealth management. The Commission is not the marketing arm for external insurance, this is the job of the Bahamas Financial Services Board (BFSB), but we support them significantly. We go to conferences and do whatever we can to assure investors that it is a well-regulated jurisdiction. What we have done over the past five years is build capacity within the Commission. We have done a tremendous job in terms of training and retaining a good cadre of professionals.

According to last year’s Insurance Commission of The Bahamas’ report, the country has one of the highest insurance penetration rates in the Caribbean. Would you consider the insurance sector could play a decisive role in the achievement of the National Development Plan (NDP)?

I would say yes. Traditionally insurance has been one of the key savings areas in the country. People either own land or a life insurance policy, these are the kind of investment opportunities that have been available. I find that we have a very high penetration on the life insurance side. I think going forward this will continue but people are becoming more sophisticated and are looking for more investment opportunities, such as our fledgling stock exchange. In regards to the NDP I believe that when people look at their financial solutions, insurance will still play a significant part, and of course it’s usually necessary if you want to have a mortgage to buy a house.

The Insurance Commission of The Bahamas was established in 2009 when world financial leaders were commencing the task of rebuilding trust in the regulatory system following the financial crisis. What has been the biggest challenges for ICB to face in order to rebuild this trust?

I think that the trust broke down after the CLICO failure. The fact that it is not resolved yet is still a challenge because at the time of the collapse, the government would have indicated that they would support CLICO up to 30 million dollars. The mechanism for that support has not yet been resolved and so that is an issue. However, over the past five years we have worked on establishing a robust risk-based supervisory framework, with off-site monitoring and on-site supervision. We have also begun a consumer awareness initiative, heightening our profile and informing the public of their rights and obligations under insurance contracts, and of the complaints process. This has been very positive in rebuilding trust with the policyholders.

How would you describe the perception of The Bahamas’ financial services sector today?

I think it is positive. There has been some consolidation of insurance companies over the past decade. Everybody has criticisms and issues from time to time but as a whole I believe that the sector is safe and secure. In terms of the complaints that come to the Commission, a lot of it is a lack of understanding by policyholders, and our consumer awareness initiatives will be focused on improving policyholder knowledge

The Insurance Commission is responsible to look after policyholders’ interest within the sector. In its role as regulator, its purpose is to ensure a sound and stable insurance marketplace and consumer confidence in the contraction in the banking sector.

What we have been working on was developing the risk-based supervisory framework. I think that this is well underway now and we do onsite and offsite supervision on a quarterly basis and keep in contact with our insurers etc.

The next big initiative that we will implement is risk based capital. We are starting that with the life insurance companies and then we will look at the general insurers. Added to that, we are in the process of implementing a new database system in conjunction with the other financial service regulators.

Given other countries in the Caribbean such as the British Virgin Islands and Cayman Islands are making strides in the financial services sector, it’s more important than ever for The Bahamas to stand out aggressively in the international arena. How you would like The Bahamas to be perceived by international investment and business communities?

It is very important for us to ensure that we are seen as a well-regulated jurisdiction and that it is not business at any cost. We want good business and we are very aware of the need to do all of our due diligence on persons who are coming to the jurisdiction.

As you well know the hardest task is not to build a good reputation rather than maintaining it over the years. How do you ensure that the ICB remains the prestigious and relevant institution worldwide investors can trust in?

I think that it is all about the people. We have spent a lot of time and money in training and ensuring that we have good people. We have been fortunate in that, because we were a new organization, we were able to recruit -and we have attracted some people from other regulators and from the industry, so I think that we have a cadre of people who are committed and serious, and that is a big part of it.

You said earlier that one of your mandates is to protect policyholders. From your experience, do other countries have a similar entity with a similar mandate, or is ICB quite unique in that way?

I think that is a mandate throughout the region and globally. We are a member of the Caribbean Association of Insurance Regulators, of which I happen to be the President currently. What we are trying to do now is to share our experiences and issues to ensure that the standard of supervision is at a level that is in line with international best practices. The Bahamas is also a member of the International Association of Insurance Supervisors, which is the standard setting for insurance regulation. We are trying to share all of our best practices so that regionally we are all on par.

HBR readers are known for being HNWIs in charge of high-end businesses. What are your strategies in order to promote worldwide the insurance commission and attract this segment?

It is the BFSB that does the actual marketing. Our role is to ensure that we have the ability to license and supervise these companies in a business friendly manner. What we try to do at the Commission is to ensure that we facilitate business as best as possible without compromising our prudential oversight or due diligence. I believe that it is important to try and find a way to make things happen especially in the insurance business with HNWIs as they come up with a lot of unique scenarios. We invite them to come in and go through their business plan so we can understand it and determine its feasibility.

As you know every company needs to have a clear set of goals but it is the vision of its leader that enables it to reach the objectives. Given this report will be published early next year, where do you - as Superintendent of BIC - see the entity in the next six months?

Over the next six months we will be testing and refining the proposed risk based capital model - our goal is to have this implemented by 2017. This is one of the bigger things but the continuous development of our people is a priority for us.

On a more personal note - Mrs. Fields, you were appointed Superintendent of Insurance in 2012, but before that gained extensive experience in the accounting fields in both London and Nassau, and in 2008, established a consultancy practice. What is the most valuable lesson you have learnt over these years that you now incorporate to your work as the head of the ICB?

One would be that in terms of managing people you have to equip them and give them the authority to do their job and then hold them accountable. I think that it is important to continuously learn and explore new things. As a wife and mother I think it is also important to have a work life balance.

The readers of Harvard Business Review include many of the world’s most influential business and political leaders. What message would you like to send them about The Bahamas and the ICB?

As a jurisdiction, The Bahamas is ideal for business as well as for living. I think that our facilities, our professionalism and our people make it a good place to do business. In regards to the insurance sector, we certainly are well-regulated and prepared to deal with any business that they bring.