Frequently Asked Questions (Domestic Insurance Sector)

 

  1. How do I know that a person is licensed to sell any form of insurance business?

Any person or company who is licensed to sell any form of insurance business will be issued a certificate of registration. The certificate of registration details the classes of insurance for which the individual is licensed to sell . The certificate is valid for one year from the date of issue and shall be renewable annually on the anniversary date of its issue.

 

 

  1. Can a salesman be registered to sell insurance for more than one insurance company?

A salesman can be registered to sell insurance for more than one insurance company however he is prohibited from selling similar classes of insurance i.e. long term or general. The sales man who seeks to sell insurance for more than one insurance agent or agency must obtain a no objection statement from the respective insurance companies.

 

  1. How does the FRSA protect the policyholder?

Protection of the interests of policyholders is the primary objective of the Financial                                    Services Regulatory Authority (FSRA) in its role as supervisor and regulator for the insurance     industry. The FSRA protects the policyholder by regulating the conduct of insurance companies and ensuring that they adhere to legislation in place, guided by the act. At the heart of this is ensuring that insurance companies are solvent. The FRSA operations are geared at preventing, mitigating and addressing any situations wherein the policyholders are at risk. The authority intervenes whenever it deems that the policyholder is at risk.

  1. How do I become licensed to conduct insurance business in St. Lucia?  

Any company proposing to undertake any insurance business in Saint Lucia must apply to the FSRA for registration.  An application for registration must be made to the Registrar on the approved form and shall be accompanied by evidence of payment of the registration fee specified and such documents as may be required by the Registrar. The Registrar may where he or she is satisfied that all the requirements of this Act governing registration have been complied with, register the company.

  1. Is my claim under a policy guaranteed to be paid by an insurer

 A claimed filed is not guaranteed to be paid. When a claim is received, the circumstances surrounding the claim will be assessed with a view to make a determination of where the policyholder will be reimbursed paid.

 

  1. How are payments made to the Authority?

 

Payments to the authority are made at the Accountant general’s office ( link to be inserted)

 

  1. How do I contact the FSRA?

The Financial Services Regulatory Authority can be contacted via telephone, email or mail.

All correspondence sent via mail to the FSRA should be addressed to the Executive Director.

Emails to theauthority can be sent to: This email address is being protected from spambots. You need JavaScript enabled to view it.. The contact number for the authority is (758) 468-2990/2991.

 

  1. What are my rights and  responsibilities as a policy holder

The rights and responsibilities of the policy holder are as follows:

  • The right to transfer ownership rights
  • The right to change certain policy provisions
  • The right to surrender or cancel the policy. In case, the policy you have selected doesn’t seem to be the ideal one for you, you have the right to cancel it, provided it is done within the period stipulated in the agreement
  • The right to pledge the policy for a loan or to borrow against its cash value
  • The right to name and to change a beneficiary
  • The right to determine how beneficiaries will receive the death proceeds
  •  Know everything about your policy-You have the right to know everything about your new policy from your insurance agent.
  •  File For A Claim-You can file for a claim for your existing policy. You need to provide all the necessary documents within the period  requested by the insurance company.
  • To not be forced into coercive tied selling- This means that insurance companies are not allowed to unduly pressure or coerce you into obtaining a product or service from them or from their affiliates,

 

 

  1. What is the distinction between an agent, broker, salesman and insurer ?

The Insurance Act, defines an insurance agent as follows; any individual, firm or company appointed by an insurer or an insurance agent to solicit applications for insurance or negotiate insurance on its behalf and if authorised to do so by the insurer, to effectuate and countersign insurance contracts but does not include an individual who is an employee of the insurer

  1. An insurance broker is defined by the Insurance Act Chapter 12.08 of the Laws of Saint Lucia as: any individual, firm or company appointed by an insurer or an insurance agent to solicit applications for insurance or negotiate insurance on its behalf and if authorised to do so by the insurer, to effectuate and countersign insurance contracts but does not include an individual who is an employee of the insurer.

Insurance brokers are charged with the responsibility of representing the interests of policyholders directly through negotiating with insurance coverage providers for the best terms and conditions for their clients. In this way, insurance brokers differ from insurance agents as the agents represent the interest of its principal insurer.

  1. An insurance salesman means an individual who is contracted by an insurer or an insurance agent to solicit applications for insurance or negotiate insurance on behalf of an insurer, or an insurance agent but does not include a bona fide salaried employee of an insurer, insurance agent or insurance broker who is employed at its principal office or branch of it.

 

 

  1. How do I know when a person is no longer licensed to conduct insurance?

A person who is no longer licensed to conduct insurance business will have their license revoked and the notice of revocation of the license will be gazetted.

 

 

  1. What is a policy loan?

A policy loan can be obtained from an insurance company against the cash surrender value of the policyholder’s life insurance policy. The cash surrender value is the amount that the policyholder is entitled to receive, upon the cancellation (or death before policy matures) of your life insurance policy The cash surrender value of the policy serves as collateral for the loan. If the policyholder dies or cancels the policy before the full repayment of the loan, the loan balance is deducted from the amount that is payable to the beneficiary (ies) when the policyholder passes away.

 

 

  1. What are the different types, classes of insurance:

 

The different classes of insurance are as follows:

  • Long Term - Life and Sickness and Health insurance classes of business
  • General (Motor vehicle, property, accident, pecuniary loss, liability, marine, aviation and transport) insurance classes of business

 

  1. What is parametric insurance ?

Parametric insurance is a type of insurance that does not indemnify the pure loss, but ex ante agrees to make a payment upon the occurrence of a triggering event. The triggering event is often a catastrophic natural event which may ordinarily precipitate a loss or a series of losses.

 

  1. What is microinsurance ?

 Microinsurance is insurance with low premiums and low caps / coverage. In this definition, "micro"         refers to the small financial transaction that each insurance policy generates.

  1. What is group medical insurance and how does it work ?

With group health insurance, a single policy covers the medical expenses of many different people. Unlike individual insurance, where each person's risk potential is evaluated to determine insurability, group health insurance allows all eligible members of the group to be covered by one policy, regardless of their age or physical condition. The premium for group insurance is calculated based on the characteristics of the group as a whole, such as average age and degree of occupational hazard. –

 

16 .Is my insurance policy subject to tax

Insurance policies are subjected to premium tax.  Five percent (5%) tax is payable on general insurance and three percent tax (3%) is payable on long term insurance.

INTERNATIONAL INSURANCE

  1. How does the domestic insurance sector differ from the international insurance sector?

The domestic insurance sector serves the general public (including residents) in St Lucia whereas, entities in the international insurance sector are prohibited from undertaking insurance business with residents or from investing in any asset which represents a claim on any resident.

  1. What is a captive insurance company?

A captive insurance company

  1. is wholly owned by one or more persons and intends to carry on an international insurance business consisting only of insuring the risks of those persons; or
  2. is an affiliate of a group and intends to carry on an international insurance business consisting only of insuring the risks of any other affiliates of that group or of its own shareholders.

 

  1. What is the difference between a protected cell company and an incorporated cell company?

The current legislation in Saint Lucia does not provide for the establishment of protected cell companies.  However, an incorporated cell company (ICC) is an international business company created for the purpose of doing insurance business using incorporated cells; each incorporated cell is separately incorporated, making them distinct legal entities. 

  1. What information must be included in the due diligence package?

The due diligence package should include at a minimum, the following in respect of each promoter of the entity:

  • Name (showing any previous name and all aliases);
  •   Date and place of birth (evidence: passport or birth certificate);
  • Current address and supporting utility bill. Private addresses for the past 10 years;
  • Data pages (including photograph) of all passport(s), duly                             notarised;
  • Social Security Number (evidence: social security card);
  • Drivers licence, duly notarised;
  • Curriculum Vitae;
    • A Banker’s reference;
    • Notarized Statutory Declaration.
    • Police Clearance
    • Undertaking to provide and set apart the minimum fully paid –up capital, before and at the time business commences, signed by all requisite shareholders.

 

  1. What is the minimum number of directors required for an international insurance company?

Section 17(1) of the International Insurance Act indicates that ‘a licensee shall have at least 2 directors, all of whom are natural persons and one of whom shall be a resident’.

For incorporated cells, Section 17(4) of the International Insurance Act indicated that ‘the majority of directors in an incorporated cell shall be directors of the incorporated cell company to which it is linked’.

  1. In what types of financial institutions or securities should the must the Statutory Deposit be placed or invested?

An eligible company may deposit or invest the applicable sum by any of the following methods:

  1. Treasury bills issued by the Government of Saint Lucia;
  2. Bonds and debentures issued by the Government of Saint Lucia;
  3. Deposits with the Saint Lucia Development Bank;
  4. Deposits with a bank licensed under the Banking Act; or
  5. Deposits with a financial institution approved by the Authority.

 

  1. Is the statutory deposit refundable?

 

Where an entity has ceased to carry on international insurance business, the statutory deposit is refunded subject to the Authority’s satisfaction that the licensee has paid all liabilities along with other financial commitments.

 

  1. Can an international insurance company be marketed to local persons?

No, entities in the international insurance sector are prohibited from undertaking insurance business with residents.

 

  1. When are Audited financial Statements due from licensees?

The audited accounts shall be forwarded to the Authority within three (3) months of the end of the financial year of the licensee, unless prior approval for an extension has been granted by the Authority.

  1. What is the solvency requirement for insurance companies?

This is the minimum amount by which the total value of an insurer’s allowable assets must exceed the total value of its liabilities.   These minimum amounts, which vary depending on the class of insurance, are in prescribed in the International Insurance Guidance Notes.

  1. How can payments be made to the Authority?

 

Payments can be are made to the Authority by making deposits to the call account of the Accountant General at the Bank of St Lucia Ltd (BOSL).

Name of Bank: Bank of Saint Lucia Limited

Account Name: Accountant General Financial Services Call A/C

Account Number: 902002464

A stamped copy of the deposit slip must be submitted to the FSRA as evidence of payment.

 

  1. Does the Authority accept payments by credit or debit card?

 

No, the Authority does not currently accept payments by credit card.

 

 

INTERNATIONAK BANKS

  1. What is the difference between a Class A and a Class B bank?

 

Class “A” Banks are allowed to conduct business with third parties excluding citizens and residents of St. Lucia. However holders of Class “B” bank licenses are specifically restricted to conducting business with a preapproved list of related parties (not exceeding 10) excluding residents of St. Lucia.

 

  1. What information should be included in the due diligence package?

The due diligence package must include the following information in respect of each promoter and senior management personnel of the entity  

  • Name (showing any previous name and all aliases);
  • Date and place of birth (evidence:  notarised coloured copies of passport or birth certificate);
  • Current Address and supporting utility bill. Private addresses for the past 10 years;
  • Data pages (including photograph) of all passport(s), duly                              notarised;
  • Social Security Number (evidence: social security card);
  • Drivers licence, duly notarised;
  • Curriculum Vitae;
  • A Banker’s reference;
  • Notarized Statutory Declaration.
  • Police Clearance
  • Where a shareholder is a corporate entity the names of the significant shareholders is required, name of ultimate beneficiaries (for Trust arrangements), last audited or management accounts, constitutional documents and certificate of good standing from its Regulator.
  • And any other documents which the Authority deems relevant.

 

  1. In what types of financial institutions or securities should the must the Statutory Deposit be placed or invested?

An eligible company may deposit or invest the applicable sum by any of the following methods:

  1. Treasury bills issued by the Government of Saint Lucia;
  2. Bonds and debentures issued by the Government of Saint Lucia;
  3. Deposits with the Saint Lucia Development Bank;
  4. Deposits with a bank licensed under the Banking Act; or
  5. Deposits with a financial institution approved by the Authority.

 

  1. Is the statutory deposit refundable?

Where an entity has ceased to carry on international banking business, the statutory deposit is refunded subject to the Authority’s satisfaction that the bank has paid all liabilities along with other financial commitments.

  1. What is meant by “physical presence”?

Physical presence means that the bank must have its premises in St. Lucia manned by more than two (2) employees along with all relevant records (banking activities) ready for inspection by the Authority at any given time.

  1. What types of banks qualify as correspondence banks?

 

The Authority generally recognizes banks licensed in OECD countries for correspondent banking arrangements along with others located in heavily/strongly regulated jurisdictions.

 

  1. What is the minimum number of directors required for an international bank?

 

The minimum number of directors required for an international bank is two (2).

 

  1. When are Audited financial Statements due for international banks?

 

International banks are required to submit Audited Financial Statements with three (3) months of their financial year end.

 

  1. What are the capital adequacy guidelines?

 

The ratio of capital (Tier I plus Tier II) to risk-weighted assets should be a minimum of 8% of which the core element (Tier I) should be at least 4.5%.

 

  1. Which BASEL framework is adopted by the Authority?

 

Currently the Authority has adopted BASEL I capital adequacy framework.

 

  1. What is meant by “mind and management”?

 

The mind and management of a bank relates to the executive and decision making arm of a bank of its day to day activities.

 

  1. Can an international bank be marketed to local persons?

 

International banks are not allowed to conduct business with local persons except for the procurement of a lease specifically relating to the conduct of its banking business.

 

  1. How can payments be made to the Authority?

Payments can be are made to the Authority by making deposits to the call account of the Accountant General at the Bank of St Lucia Ltd (BOSL).

Name of Bank: Bank of Saint Lucia Limited

Account Name: Accountant General Financial Services Call A/C

Account Number: 902002464

A stamped copy of the deposit slip must be submitted to the FSRA as evidence of payment.

 

  1. Does the Authority accept payments by credit or debit card?

The Authority does not currently accept payment by credit card.

 

 

MONEY SERVICES BUSINESS

  1. What is a Money Services Business?

 

Under the Money Services Business Act, No. 11 of 2010, the term money services business is defined as:

  1. the business of providing (as a primary business) any one or more of the following —
  • transmission of money or monetary value in any form;
  • cheque cashing;
  • currency exchange;
  • the issuance, sale or redemption of money orders or traveller’s cheques;
  • Micro-lending and any other services the Minister may specify by Notice published in the Gazette; or
  1. the business of operating as an agent or franchise holder of any of the businesses mentioned in paragraph (a);

 

  1. Does the Authority regulate MoneyGram and Western Union?

Both MoneyGram and Western Union operate in Saint Lucia through local Agents. These local Agents are regulated by the Authority.

  1. What is a micro lending Institution?

“Micro lending institution means any financial institution other than a bank whose business is that of money lending or granting of credit facilities up to a limit of fifty thousand dollars and which does not solicit, receive or accept monetary deposit, investment or any other financial instruments from the public to finance these loans”

  1. Can a micro lender accept deposits?

A micro lender cannot solicit, receive or accept monetary deposit, investment or any other financial instruments from the public to finance loans.

  1. Does the Authority control the interest rates charged by Micro-Lenders?

No. The Authority does not control/cap the maximum interest that can be charged by Micro Lenders since there are no usury laws in Saint Lucia.

 

  1. When is the annual licence fee for Money Services Business payable?

All licensees are required to pay an annual licence fee on or before 15 January each year. 

 

 

  1. When are Audited Financial Statements due from licensees?

Section 16 (2) of the Money Services Business Act, No. 11 of 2010states “A licensee shall within three months of the end of the financial year, forward the audited financial statements referred to in subsection(1) to the Authority unless prior written approval for an extension has been granted by the Authority.

 

  1. What information must be included in the due diligence package for shareholders, directors and senior officers include?
  1. A completed Personal Questionnaire;
  2. Copies of valid passports, national identity card; or driver’s licence
  3. Two character references (Lawyer and Attorney);
  4. One financial reference;
  5. Copy of Resume
  6. Utility Bill as proof of address and
  7. A police clearance.

 

  1. What criteria are used to determine whether an applicant for a licence is "fit and proper"?

 

As per Section 6(5) of the Money Services Business Act, in determining whether a person is "fit and proper", the Authority will consider a person's:

(a) honesty, integrity and reputation;

(b) competence and capability; and

(c) financial soundness.

 

  1. Where can I obtain a copy of the Money Services Business Act, No. 11 of 2010 (as Amended)?

A copy of the Act can be obtained from the National Printing Corporation at a minimal cost.

 

  1. How are payments made to the Authority?

Payments can be are made to the Authority by making deposits to the call account of the Accountant General at the Bank of St Lucia Ltd (BOSL).

Name of Bank: Bank of Saint Lucia Limited

Account Name: Accountant General Financial Services Call A/C

Account Number: 902002464

A stamped copy of the deposit slip must be submitted to the FSRA as evidence of payment.

 

 

INTERNATIONAL MUTUAL FUNDS

 

  1. What is the difference between a public mutual fund and a private mutual fund?

 

  • By definition, a public mutual fund comprises a fund where: “the constitutional documents, offering document and any other documents which specify that the making of an invitation to subscribe to the mutual fund is to be made to the public”. Due to this nature, a public mutual fund is regulated and thus provided with a license to conduct mutual fund business.

 

  • A private mutual fund on the other hand is not licensed, but registered with the Authority. In addition, its equity interests are limited to 100 persons; the minimum total investment in the fund is UD$50,000 per person and is not marketed to the public.

 

  1. Are private mutual funds licensed?

Private mutual funds are not licensed.  They are registered with the FSRA on an annual basis.

  1. What information must be included in the due diligence package?

The due diligence package must include the following information in respect of each director, shareholder and of the Applicant:

  • Name (showing any previous name and all aliases).
  • Date and place of birth.
  • Current Address and supporting utility bill.
  • Data pages (including photograph) of all passport(s) duly notarised.
  • Social Security Number.
  • Drivers licence.
  • Curriculum Vitae.
  • A Banker’s reference, accountant’s reference and lawyer’s reference.
  • Notarised Statutory Declaration
  • Any other documents which the Authority deems relevant.
  • Where a shareholder is a corporate entity the names of the significant shareholders is required, name of ultimate beneficiaries (for Trust arrangements), last audited or management accounts, constitutional documents and certificate of good standing from its Regulator.
  • And any other documents which the Authority deems relevant.
  1. What is the minimum number of directors required for a Mutual Fund Managers and Administrators?

 

For a Public Mutual Fund Manager and Administrator, the minimum number of directors required is two (2).

 

  1. When are the Audited financial Statements due from licensees?

 

The audited accounts of the international public mutual fund, international mutual fund manager and international mutual fund administrator shall be forwarded to the Authority within three (3) months of the end of the financial year of the licensee, unless prior written approval for an extension has been granted by the Director.

 

  1. Are Private Mutual Funds required to submit Audited Financial Statements?

 

Private Mutual Funds are not required to submit Audited Financial Statements to the Authority.

 

 

  1. How can payments be made to the Authority?

 

Payments can be are made to the Authority by making deposits to the call account of the Accountant General at the Bank of St Lucia Ltd (BOSL).

Name of Bank: Bank of Saint Lucia Limited

Account Name: Accountant General Financial Services Call A/C

Account Number: 902002464

A stamped copy of the deposit slip must be submitted to the FSRA as evidence of payment.

 

  1. Does the Authority accept payments by credit or debit card?

The Authority does not currently accept payments by credit card.