In a transfer in direction of modernizing and enhancing monetary safety, Belize has launched a New Insurance coverage Act, which got here into impact on October 1, 2023. This landmark laws replaces the earlier Insurance coverage Act and the Worldwide Insurance coverage Act.
The New Insurance coverage Act represents an vital second in Belize’s regulatory framework for insurance coverage, merging the Insurance coverage Act and the Worldwide Insurance coverage Act right into a complete and forward-thinking authorized framework that’s designed to serve the pursuits of each the Belizean inhabitants and the worldwide insurance coverage business.
Among the key highlights of the New Insurance coverage Act embrace:
- Introduction of Micro Insurance coverage: One of the vital noteworthy introductions beneath the New Insurance coverage Act is the inclusion of micro insurance coverage. This modern addition bridges the safety hole and presents an important catastrophe danger financing instrument, significantly benefiting the low-income productive sector. It addresses the challenges confronted by those that had been beforehand unable to acquire insurance coverage attributable to excessive charges within the industrial market or the unavailability of satisfactory insurance coverage protection.
- Transition to a Threat-Based mostly Framework: The brand new Insurance coverage Act represents a major shift from a rules-based framework to a risk-based method in insurance coverage supervision. The rule-based method requires compliance with guidelines regardless of the underlying danger. The danger-based method is extra versatile than the rule method, because it leaves the likelihood to the monetary establishments to think about the dangers of their complete.
- Alignment with Worldwide Requirements: The mixed impact of the brand new Insurance coverage Act and the accompanying rules positions Belize in compliance with the Insurance coverage Core Ideas of the Worldwide Affiliation of Insurance coverage Supervisors (IAIS) and with suggestions from the Monetary Motion Job Power (FATF). This alignment with worldwide requirements strengthens Belize’s standing within the international insurance coverage panorama.
- Enhanced Inclusivity: The Act categorizes licenses for insurers conducting enterprise in Belize and from inside Belize, permitting for the inclusion of worldwide insurers, captives, reinsurers, and different lessons of insurers. These provisions assist the sound improvement of inclusive insurance coverage, with a concentrate on microinsurance and parametric merchandise. This method fosters monetary inclusion and narrows the disaster-risk safety hole.
Minister of State in Belize’s Ministry of Finance, Christopher Coye remarked, “the Authorities of Belize is dedicated to the observance of worldwide greatest practices, particularly those who foster monetary stability, financial improvement, monetary inclusion, and safety of shoppers. The brand new Insurance coverage Act is an illustration of that dedication, and we stay up for the implementation of this laws.”
The event of the brand new act has been a collaborative effort between the World Financial institution, the IMF – by CARTAC – and the Authorities of Belize. It concerned key stakeholders, together with insurance coverage market members, authorities authorities, policymakers, and different specialists. This inclusive method ensures that the laws is tailor-made to satisfy the particular wants and realities of Belize.
“The introduction of the brand new insurance coverage act underscores Belize’s dedication to modernization, monetary inclusion, and the safety of its residents and companies. The inclusion of microinsurance helps those that face ongoing obstacles to acquiring essential protection. It ranges the enjoying discipline, and by doing so, it contributes to Belize’s broader financial,” stated Lilia Burunciuc, World Financial institution Nation Director for the Caribbean international locations.
The act aligns with ongoing initiatives to reinforce Belize’s Anti-Cash Laundering and Counter Financing of Terrorism measures, additional strengthening the nation’s monetary and regulatory panorama.
The brand new act was developed throughout the World Financial institution’s Monetary Options for Local weather and Pure Catastrophe Dangers Program within the Caribbean, funded by the UK International, Commonwealth & Improvement Workplace.
