A public dispute has erupted between Jamaica’s insurance sector and the country’s top financial regulator over planned industry-wide fee increases, with the Insurance Association of Jamaica (IAJ) formally opposing the proposal over claims of a severely flawed consultation process and systemic lack of transparency.
At the heart of the conflict is a fundamental disagreement over whether the Financial Services Commission (FSC), Jamaica’s financial regulator, properly engaged the industry before submitting the fee changes to Parliament’s Regulations Committee for approval. IAJ Executive Director Everton McFarlane told the Jamaica Observer in an interview Friday that critical FSC financial data was withheld from industry stakeholders during pre-submission talks, leaving insurance providers unable to conduct a thorough assessment of the proposed hikes or deliver a meaningful, informed response to policymakers.
McFarlane emphasized that the FSC’s financial statements have been chronically out of date throughout the consultation period, making it impossible for the industry to verify whether the requested fee increase is reasonable or justified. “Our position is clear: we cannot support this increase in its current form,” McFarlane stated. “We asked for detailed data to help us understand the reasoning behind the proposal, but we received nothing. Without up-to-date FSC accounts, we have no way to measure how much the regulator’s operating costs have risen — how can we be expected to judge if this hike is fair?”
The IAJ further revealed that transparency issues extend beyond closed-door consultations: the FSC has not published a full annual report with audited financial statements on its official website since the 2021 fiscal year, creating what McFarlane describes as critical gaps in public accountability that amplify the industry’s concerns. He added that while the association recognizes the FSC requires stable funding to carry out its regulatory mandate, the current process is unfair. “Fairness demands balance, not imposing increases just because the regulator has the authority to do so. We expected open, ongoing dialogue, not a rushed push for approval,” McFarlane said.
These claims stand in direct opposition to statements from FSC Executive Director Lieutenant Colonel Keron Burrell, who told the parliamentary committee Thursday that the regulator had conducted consistent, productive engagement with insurance industry representatives throughout the process. Burrell defended the proposed increases, noting that the FSC has not raised industry fees in 18 years, and that the regulator has already adjusted its timeline in response to industry disruptions caused by extreme weather events, including 2024’s Hurricane Beryl. He also reaffirmed that the FSC held multiple consultation events and ongoing discussions with stakeholders over an extended period.
Beyond the procedural dispute, the IAJ is challenging the substantive justification for the fee hikes. Burrell told the committee that Jamaica’s insurance sector has grown dramatically since the FSC’s founding in 2008, expanding from $170 billion in total assets to more than $728 billion over 18 years, arguing that the larger, evolving sector requires increased regulatory funding.
But McFarlane pushed back on that logic, noting that the FSC’s existing fee structure is already tied to the total value of the sector’s assets. As the industry grows, the regulator’s annual revenue automatically increases alongside asset values. McFarlane argued that this organic growth has already outpaced inflation over the past 18 years, meaning the current funding shortfall cited by the FSC is not the result of outdated fee rates, but rather poor management of existing revenue. He also rejected claims that the insurance sector has become significantly more complex to regulate, noting that most core products remain unchanged, and the sector is already well-capitalized, highly liquid, and governed by strict existing capital and investment rules.
McFarlane also raised alarm over the scale and timing of the proposed increases, which he said include some hikes of more than 100 percent. He warned that the steep increases would impose an unsustainable heavy burden on insurance companies that are still working to recover from financial losses caused by recent severe weather events that have impacted the island.
The IAJ is now calling for renewed, transparent dialogue between the two sides, and is asking policymakers to consider either delaying the implementation of the fee increases or rolling them out in a gradual phased approach. “Any adjustment to industry fees must be fair, and it must be properly explained to all stakeholders,” McFarlane said.
The disagreement played out publicly during Thursday’s parliamentary committee deliberations, when Kingston Central Member of Parliament Donovan Williams pressed Burrell on whether the industry would publicly oppose the proposal. Asked whether he expected to see public pushback in headlines after the meeting, Burrell acknowledged the issue is sensitive and that public pushback was possible, but stood by the FSC’s process.