Barbados: The Role Of The Financial Services Commission In A Changing Regulatory Environment

The main objective of the Financial Services Commission (FSC) in Barbados is to promote financial stability in the financial system. This is a task in which the FSC takes great pride, and all available resources are aligned to ensure that this task is addressed with alacrity by its highly competent staff. In order to promote financial stability, the FSC has sought to create a regulatory framework that is robust and that meets best practice standards, whilst always considering the markets in which entities operate. In its role, the FSC is also acutely aware of the need to balance quality regulation with business facilitation, in order to create an environment in which measured growth is possible.

In reviewing the regulatory framework which the FSC has designed, it is worthy of note that the framework consists of right-sized legislation, statutory filing requirements, onsite examination, cross border supervision, and entity level assessments that look at the static position of entities as well as forecasted positions based on the established trends. This framework is buttressed by an internal operational mechanism for ongoing review and improvement of the regulatory system.

Further, the regulatory system encourages substance in the business activity conducted by regulated entities. International insurance companies and captive insurers registered in Barbados can attest to this fact, both from the legislative framework and from the operational practices of the FSC.

Companies are required to:

  • submit business plans detailing the proposed insurance activity when seeking licences
  • submit periodic statutory returns to the regulator, which are, in some cases, assessed by an actuary
  • have a principal representative in the jurisdiction who is responsible for the company's affairs
  • have copies of financial records available for review by the Regulator.

Board meetings are held in the domicile, and oftentimes the Regulator entertains meetings with directors on matters related to the company. These actions, and more, are part of a pragmatic regulatory environment that lends substance to the activities of the entities registered in Barbados.

The strong regulatory environment in Barbados is, therefore, a positive for the country, since it promotes financial stability.  It is also beneficial for companies which set up captives in Barbados, for a myriad of reasons, including the fact that they are seeking:

  • speciality line cover, which is difficult to obtain in the commercial market
  • an alternative to the commercial market, because of low probability of risk occurrence
  • access to the reinsurance market, and
  • to enter into other insurance markets.

The highly trained staff and strong regulatory framework at the FSC is recognised globally. Registered companies can confidently display the Barbados licence when seeking to conduct global business, because the Barbados licence is widely recognised and respected.

Having regulated captive insurance companies for over 30 years, Barbados has used the knowledge gained to ensure that the registered captives are appropriately regulated, but not onerously so, such that facilitation is possible while promoting financial stability. Therefore, in the face of growing global queries on the role of international financial centres, we stand resolute to any and all assessments. The retention rate of our captive insurance sector remains very high, due mainly to the fact that the captives are conducting substantive insurance activity and the regulatory framework pushes companies to ensure they are appropriately structured as a going concern. As a regulator, the FSC commits to ensuring that the regulatory framework remains a robust one, and it is clear that existing and future captive insurers in Barbados will continue to benefit from the FSC's unwavering commitment to being the best in world at what we do. Captives registered in Barbados are in a well regulated and stable financial environment, ready to do business.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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