Opposition warns $500 million FSC withdrawal could drive up insurance premiums

The parliamentary opposition is warning that insurance costs for Jamaicans could rise after the Government withdrew $500 million from the Financial Services Commission (FSC), which regulates the island's insurance sector.

Finance Minister Fayval Williams has indicated that taking the money from the FSE does not threaten the entity. Julian Robinson, the opposition spokesman on finance, disagrees. He argues that if insurance companies are required to pay substantially more into the FSE, consumers will carry the added cost.

Robinson called on the administration to rethink the decision, consult with the industry, and phase in any necessary increases rather than imposing them all at once.

"Rethink the decision. Consult with the industry. Find a way to ensure if you need to make increases, phase them in," he said. "But you can't have an insurance company, one of the largest, moving from paying an annual flat rate of 500,000 to paying over 100 million and then you expect them to absorb that, they're not going to absorb it. They're going to pass the cost on."

Robinson warned that higher premiums could lead motorists and homeowners to scale back or drop coverage altogether.

"And then what going to happen? People who supposed to insure them car not going insure them car. People insure their houses cannot fully insure their houses," he said. "We live in a hurricane. We live in a situation where you are going to have natural disasters and people are not going to have sufficient coverage based on this decision."

He described the withdrawal as a bad decision and called on the Government to reverse it.