Inadequate supervision of insurance companies and banks is a topic of interest to the money laundering community, so I am publishing this story under this blog. You may want to read the entire FSSA report carefully as it may be implying that a local Bajan bank is in trouble.
Nation News (Feb 24, 2009 – Insurance queries by GERALYN EDWARD) ran a story that tipped me off to finding an IMF report on Barbados. Here is a quote from the Nation:
THE INTERNATIONAL MONETARY FUND (IMF) has raised serious questions about the supervision of Barbados’ insurance sector.
An IMF Financial System Stability Assessment (FSSA) released yesterday evening said the “lack of adequate supervision of the insurance sector” exposed the sector to “material risks”.
I am posting a couple of snips from the original source, the FSSA report. Clicking on these snips will download the entire report so that you can read it. (Or if you prefer, I have a standard page with the key findings here.)
The mention of Trinidad, Barbados and insurance in a single paragraph brings a certain insurance company to mind!
Is a Certain Barbados Bank in Danger of Failing?
Bank capitalization
Why is Supervision Important?
There was an insurance problem in Barbados in 2006. Under Supervisor of Insurance Carlos Belgrave, the following companies operated:
- Strategy Insurance Limited,
- Reliant Insurance SCC
- River Reinsurance Limited – formally licensed by the Barbados Supervisor of Insurance as an Exempt Insurance Company, (see SEC report, also this), owned by River Capital Group, Inc. a.k.a. Sonterra Resources, Inc. (SOTR)
These three companies were investigated in 2006, by Offshore Alert and KYC (Know your client) News, who voted Carlos Belgrave as the worst insurance regulator. (The “OffshoreAlert Awards – Best & Worst of 2006″ can be purchased from the KYC News Story Library.)
I am not going to quote the details in the report as I cannot cross-reference them from other sources. However, my research on the three companies shows that they are worth very little. Last time I checked, Strategy Insurance Limited was $0.0005 (20 shares for 1 cent), Reliant Insurance SCC was $ 0.001 (20 shares for 1 cent), and Sonterra Resources, Inc. was $0.35 after a reverse 1:10 split under its former name of River Capital Group, Inc.
An insurance company should be as solid as a rock. These companies may not be that solid.
Without adequate supervision, the insurance policy holder is at risk. Without adequate supervision, companies may fail without warning or company assets may even be purposely diverted.
4 responses so far ↓
» CLICO Quiz Keltruth Corp.: News Blog of Keltruth Corp. - Miami, Florida, USA. // February 25, 2009 at 12:14 am
[...] CLICO Quiz Posted in February 25th, 2009 by admin in Government, Politics and Development, West Indies News, Barbados I was hoping to write a post tonight, but I fell behind after writing an article for the Barbados Money Laundering Advisory – Bajan Banks and Insurance Companies Inadequately Supervised [...]
Bajan Banks and Insurance Companies Inadequately Supervised … | Ace Card's Caribbean Vacation // February 25, 2009 at 12:47 am
[...] the rest of the post here: Bajan Banks and Insurance Companies Inadequately Supervised … bajan-banks, barbados, barbados-money, development, florida, government, inadequately, [...]
Carlos Belgrave, Supervisor of Insurance and Pensions in Barbados, Called “Worst Regulator” By OffshoreAlert « Barbados Free Press // February 26, 2009 at 11:20 pm
[...] article about the IMF and Offshore Alert reports AND they seem to think that the IMF report also talks about another potential failure of a Barbados bank. Scary times we are living [...]
2009 INSCR Vol. II: Money Laundering and Financial Crimes - Barbados « Barbados Money Laundering Advisory // March 7, 2009 at 9:03 pm
[...] Is the Central Bank effectively supervising the banking industry? See my BMLA post: Bajan Banks and Insurance Companies Inadequately Supervised [...]