Cayman’s oldest insurance company
faces an uncertain future after the Central Bank of Trinidad and Tobago ordered
it to suspend operations for 60 days effective 15 June.
Although personnel in the Cayman
branch of Motor and General, one of Cayman’s largest vehicle insurers,
initially indicated that the suspension would not affect local operations, the
order is applicable here, according to the Cayman Islands Monetary Authority’s
Public Relations Executive Joan Scott.
“Motor and General is incorporated
in Trinidad and not the Cayman Islands,” she said Friday. “What happens there
will affect what happens here.”
After issuing a vague statement on
the matter last Wednesday, the Monetary Authority’s Public Relations Officer
Ruth Myles on Friday responded to some specific questions, including whether
Cayman drivers with Motor & General insurance would still be covered.
“The Cayman Islands Monetary
Authority wishes for the public to be aware that people insured with the Cayman
branch of Motor & General Insurance Company Limited continue to have valid
insurance coverage,” she stated.
Ms Myles confirmed that the Cayman
Islands Motor & General office is expected to fully comply with the
suspension order made on its parent company.
“This suspension is to allow for
further investigation into Motor & General Insurance Company Limited’s
affairs whilst protecting policy holder rights and obligations,” she stated.
Trinidad and Tobago Central Bank
Inspector of Financial Operations Carl Hiralal said the regulatory action was
taken because of problems with the company’s statutory returns.
“The 2007 to 2008 returns were
filed late and were filed incorrectly and we have had to reject those returns,”
he said. “That makes it difficult for the regulator to assess the financial
position of the company.”
Although the company is barred from
writing any insurance business, including new and renewal business, and is also
prevented from processing claims during the suspension, its existing policies
remain in force. There are safeguards in place for those insured with Motor
& General in the Cayman Islands, which Ms Myles pointed out.
“Pursuant to the (Cayman Islands’)
Insurance Law (2008 Revision), CIMA requires that all its domestic insurance
licensees maintain a statutory fund sufficient to meet their domestic policy
holders liabilities,” she stated. “CIMA monitors, at regular intervals, the
value of these funds to ensure that they are maintained at the required
Ms Myles stated that the Monetary
Authority is required to follow due process on all regulatory matters in
keeping with Cayman Islands law.
“The Central Bank of Trinidad and
Tobago’s order does not preclude CIMA from taking its own action,” she stated.
“Such action is based on a thorough assessment of the licensee and adheres to
the legal and regulatory requirements. While further details cannot be
disclosed at this time, CIMA has been taking, and continues to take, all action
to protect Motor & General Insurance Company Limited’s local policyholders
and the assets of the company’s local operations.”
Because the situation is an
on-going matter, the Monetary Authority said it was restricted in providing
additional information at the current time.
“The Authority will provide further
updates to the public as and when it is in a position to do so,” Ms Myles
stated. “Policyholders who have specific questions regarding their policies
should contact Motor & General Insurance Company Limited.”
Although the suspension order was
made last Tuesday, Motor & General in Cayman was still operating on
Thursday, according to its manager.
On 17 June, Manager Beverly Banks
said the situation in Trinidad has absolutely no bearing on operations in
Cayman. Mrs. Banks said policies in the Cayman Islands would not be affected,
and that it was “business as usual”.
“Cayman is fine. We
have no problem,” she said, adding that an official statement would be forthcoming.
However, that statement has not been received.