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Caribbean Insurers
New Trinidad & Tobago Insurance Rules Finally Implemented in 2021

New rules take effect a decade after they were proposed.
  • June 2021
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This is an excerpt from the Best's Commentary New Trinidad &Tobago Insurance Rules Finally Implemented in 2021. The entire report can be accessed at www.ambest.com.


With the proclamation by President Paula-Mae Weekes of Trinidad &Tobago, the Insurance (Amendment) Act of 2020 (which incorporates the Insurance Act of 2018) became law effective Jan. 1, 2021.

This legislation has been long in the making and undergone several revisions. The initial draft legislation, which emerged as far back as 2011, was extensively deliberated and subsequently amended. The 2020 Act's precursor, The Insurance Bill of 2016, was eventually passed unanimously by the Trinidad &Tobago House of Representatives on Feb. 16, 2018, and was sent to its Senate for debate and approval.

The Association of Trinidad and Tobago Insurance Companies (ATTIC) has endorsed the 2020 version, which aims to protect the interests of policyholders, strengthen corporate governance, raise the standards of professionalism within the industry, and improve accountability.

Key elements addressed by the 2020 Act include capitalization, corporate governance, internal controls and regulatory oversight.

Capital Requirements

The 2020 Act addresses the minimum capital requirements that insurance companies domiciled in Trinidad &Tobago must maintain. The required minimum stated capital for all companies is TT$15 million (US$2.2 million). Companies must also maintain a minimum regulatory capital ratio of 150%. This is a significant increase over previous requirements. Under the old regulations, life insurance companies carrying on long-term business were required to have share capital of TT$3 million, while insurance companies writing short-term insurance business (general insurers) were required to have capital of TT$1 million. The 2020 Act sets a five-year transition period for existing insurance companies to meet the required guidelines, which will moderate the impact of the increased capital requirements.

Corporate Governance and Internal Controls

Among a number of key provisions of the 2020 Act are guidelines to strengthen internal controls, risk and capital management, and corporate governance. Companies are now required to have an audit committee comprised of members of the board of directors. CEOs and CFOs must acknowledge the responsibility of the directors and officers of the company relative to preparing financial statements, maintaining adequate internal controls, and complying with legal and statutory requirements. The 2020 Act also requires the board of directors to establish formal policies and procedures to address related-party transactions. These stipulations of the 2020 Act aim to restrict excessive risk-taking and promote good governance and sound risk management practices by a company's board of directors and management.

Central Bank of Trinidad &Tobago (CBTT)

The 2020 Act grants much wider regulatory powers to the CBTT, which is charged with regulatory oversight of the Trinidad &Tobago insurance industry. Significant among these is the authority to address market conduct issues. The 2020 Act includes provisions for CBTT to revoke an insurer's registration depending upon the severity of the infraction. The CBTT may intervene in an insurer's operations when its capital ratio falls to 70% or lower. Furthermore, the 2020 Act institutes a comprehensive catalog of punitive fines and penalties for misconduct by insurance companies and their intermediaries.

According to the CBTT, the major enhancements to the insurance legislation will improve corporate governance for policyholder protection, stipulate stronger supervisory powers and tools for the Central Bank, provide greater safeguards for policyholders' funds, preserve the integrity and soundness of the financial sector, and improve standards of market conduct to ensure greater transparency in marketing and selling insurance products.

Looking Ahead

Despite the five-year transition period permitted under the 2020 Act for companies to address capital requirements and minimum regulatory capital ratios, some insurance stakeholders believe that the more stringent measures may stress the balance sheets and test the ability of some companies to enhance capitalization, which could ultimately see them become acquisition targets.

AM Best believes that the 2020 Act will not be impactful for rated Trinidad &Tobago-domiciled insurers. These companies maintain capitalization levels well in excess of the minimum threshold required under the 2020 Act, and have already implemented enterprise risk management programs that appropriately address corporate governance and internal controls.

Best’s Rankings

Largest 30 Caribbean Insurers 2019 Ranked by Gross Premiums Written

(US$ thousands)

Rank AMB # Company Country of Domicile Gross Premiums Written Capital & Surplus
1 073838 Manufacturers Life Reinsurance Ltd. Barbados 4,525,761 722,334
2 057453 IAT Reinsurance Co. Ltd. Cayman Islands 1,897,647 1,157,361
3 090222 RGA Atlantic Reinsurance Co. Ltd. Barbados 1,686,136 1,511,266
4 086956 Royal Bank of Canada Insurance Co. Ltd. Cayman Islands 1,668,021 1,066,491
5 056952 TD Reinsurance (Barbados) Inc. Barbados 1,572,347 181,115
6 087118 Guardian Holdings Ltd. Trinidad and Tobago 956,721 599,192
7 086569 Sagicor Life Inc. Barbados 830,589 1,564,555
8 046431 Global Indemnity Ltd. Cayman Islands 636,861 726,809
9 055430 Greenlight Capital Re Ltd. Cayman Islands 523,977 477,183
10 057051 Scotia Insurance (Barbados) Ltd. Barbados 501,353 173,426
11 072561 CIBC Reinsurance Co. Ltd. (1) Barbados 484,266 125,320
12 056229 BMO Reinsurance Ltd. Barbados 475,758 232,604
13 072139 Knight Insurance Co. Ltd. Cayman Islands 404,354 757,630
14 055019 Raffles Insurance Ltd. Cayman Islands 314,279 309,996
15 087832 Seguros Universal S.A. Dominican Republic 304,694 89,760
16 052818 Atlas Financial Holdings Inc. (1) Cayman Islands 286,614 5,699
17 085496 Energy Insurance Mutual Ltd. Barbados 286,016 1,152,971
18 086037 London Life and Casualty Reinsurance Corp. Barbados 261,750 426,300
19 086911 Best Meridian International Insurance Co. SPC Cayman Islands 258,559 67,111
20 091083 Barents Re Reinsurance Co. Inc. Cayman Islands 232,315 493,316
21 095145 Scotia Reinsurance Ltd. Barbados 227,365 64,305
22 071369 Humano Seguros S.A. Dominican Republic 213,305 46,494
23 052640 Nagico Holdings Ltd. Anguilla 209,391 80,336
24 093077 Ocean International Reinsurance Co. Ltd. Barbados 209,293 41,745
25 075015 Fortegra Indemnity Insurance Co. Ltd. Turks and Caicos 171,051 85,131
26 092870 Seguros Banreservas S.A. Dominican Republic 169,928 89,352
27 086916 Massy United Insurance Ltd. Barbados 167,957 70,278
28 084257 Mapfre BHD Compania de Seguros S.A. Dominican Republic 163,806 74,142
29 075491 INRECO International Reinsurance Co. Cayman Islands 163,456 275,796
30 087007 Bahamas First Holdings Ltd. Bahamas 160,629 62,327

(1) Data based on 2018. Data for 2019 not available at time of publishing.

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