General information
The basis of the supervisory task of the Centrale Bank van Suriname (henceforth referred to as CBvS) is laid down in article 10 of the Central Bank Act 2022 (Official Gazette 2023 no. 65). According to this article, the CBvS has, among other things, the task of supervising the banking and credit system, the pension and the insurance sector, the money exchange transactions and the transfer of financial resources to and from abroad and the capital market, against the background of the applicable legislation and regulation. The supervision focuses on the soundness and integrity of the institutions active in these sectors and sub-sectors.
The Supervision Directorate is headed by a director and consists of the Insurance Supervision Department, Pension Fund Supervision Department, Credit Union Supervision Department, Bank Supervision Department, Money Transfer Offices Supervision and Capital Market Supervision Department, Financial Integrity Department and Financial Stability Department.
The Insurance Supervision Department supervises 12 insurance companies and 1 holding company. The supervision of the aforementioned institutions is currently regulated in the Banking and Credit Institutions Supervision Act 1968 (Bulletin of Acts, Orders and Decrees. 1968 no. 63) as lastly amended by Decree of 7 November 1986 (Bulletin of Acts, Orders and Decrees 1986 no. 82) (henceforth referred to as WTK 1986).
The supervision of insurance companies includes:
- prudential supervision; which focuses on guaranteeing financial stability by monitoring compliance with the rules regarding the soundness of insurance companies and thus protecting the interests of insured persons and third parties entitled to insurance benefits and the confidence of the public in the insurance sector.
- integrity supervision; which focuses on combating financial and economic crime (such as the prevention and combating of money laundering and the financing of terrorism, fraud, corruption, conflicts of interest and violation of sanctions legislation) to guarantee financial stability and confidence in the financial sector. Integrity supervision also includes overseeing that there is an ethical corporate culture, granting permits and assessing the suitability and integrity of executive directors, board members and qualified shareholders.
The supervision of the CBvS does not extend to mediating between individual clients and insurance companies. Due to the assigned tasks, the CBvS concentrates on tackling matters of a collective nature. Responding to problems between individual clients and insurance companies therefore falls outside the orientation area of the CBvS.
The supervision of insurance companies is carried out through off-site monitoring, on-site inspections and periodic meetings. The aim of the supervision is to assess the financial condition and activities of an insurer, to assess the effect of the business management and financial relationships among the insurer and its affiliated companies, as well as to verify compliance with laws and regulations relating to the prevention and combating of money laundering and the financing of terrorism.
Off-site monitoring
The off-site monitoring can be described as the processing, analysis and assessment of, among other things, the financial information or reports of the insurance companies. The findings of which act as a signal for possible problems, grouped by risk areas.
On-site inspection
On-site inspections are carried out at an insurance company with the aim to compare the institution's risk profile with its risk-bearing capacity and to identify any issues that may affect the institution's ability to meet its long-term obligations to policyholders. On-site inspections may supplement the analysis from off-site monitoring and provide the supervisor with the opportunity to verify received information. On-site inspections may also help detect problems that may not be apparent through off-site monitoring. It is important that on-site inspections are coordinated with off-site monitoring to increase efficiency and avoid duplication of work.
Based on its findings and the information obtained during the on-site inspection, the CBvS can oblige an insurance company to take measures that are considered necessary to guarantee sound business operations.
Periodic meetings
The periodic meetings have the following objectives:
- Stay informed of developments within insurance companies and the insurance sector;
- Discuss notable developments directly with the insurance company's management;
- Monitor agreements made during the on-site inspection or recommendations made as a result of the findings observed.
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Placing an insurance company under supervision
Pursuant to article 5 paragraph 1 of the WTK 1986, which is still applicable to insurance companies, a declaration of no objection from the CBvS is required for every legal entity that wishes to conduct business in Suriname. In addition, a business license must be obtained from the Ministry of Economic Affairs, Entrepreneurship & Technological Innovation.
The application for a declaration of no objection to conduct insurance business must include a number of details as mentioned in the guidelines on the application for a declaration of no objection such as:
- A business plan that includes a market study;
- A minimum share capital to be determined by the CBvS;
- The objective of the insurance company (to be established), clearly expressed in the name;
- The legal form of the insurance company;
- The minimum number of executive directors or supervisory board members as determined by the CBvS;
- Annual statements should be submitted to the CBvS within a specific period as determined by the CBvS;
- Furthermore, the (draft) articles of association of the insurance company (to be established) must also comply with a number of requirements of the CBvS. Amendments are subjected to the approval of the CBvS.
The CBvS has a draft act, namely the “Insurance Supervision Act” (henceforth referred to as WTV), which will replace the WTK 1986. The draft Insurance Supervision Act was sent to the minister of Finance & Planning, who will redirect the draft Act to parliament for approval. Both acts aim to exercise supervision to protect the interests of insured persons and third parties entitled to insurance benefits, as well as to promote public confidence in the insurance sector. Unlike the WTK 1986 the WTV is a specific and separate regulation for the supervision of the insurance sector, including insurance intermediaries and holding companies.
The new act will provide the CBvS with more power and more effective instruments to exercise its supervision. For example according to the WTV, the CBvS will act as the only licensing authority. It will also authorize the CBvS to take immediate actions against insurance companies who do not comply with the Act, depending on the seriousness of the circumstances.
In addition to the aforementioned requirements the CBvS assesses, in accordance with the Directive for Suitability of Executive Directors, Supervisory Board Members and Qualified Shareholders of Insurers issued on March 10, 2021 (henceforth referred to as the Directive for the Suitability of Persons of Insurers), whether a candidate executive director or supervisory board member is suitable for a position and whether his or her integrity is beyond doubt.
However, at all times it remains the responsibility of the supervised insurance company to carry out an adequate assessment of the expertise, professionalism and integrity of candidates nominated for a management or supervisory position, as well as qualified shareholders.
Assessment of integrity and expertise of Executive Directors, Supervisory Board Members and Qualified Shareholders
In accordance with the Directive for the Suitability of Persons of Insurers, the CBvS assesses the following persons:
- all persons, both natural persons and legal entities, who directly or indirectly, alone or in consultation, can significantly influence decision-making at the insurer at the highest level. This concerns qualified shareholders of the insurer and, where appropriate, their representatives.
- All persons who, as executive directors or supervisory board members, are or will be responsible for the management or supervision of the insurer.
When is the assessment carried out and of which persons?
The assessment is carried out at the registration of candidate executive directors or supervisory board members of a starting insurance company, incumbent board members who are standing for re-election, when there is a change in the duties of an executive director or when holding, acquiring or increasing a qualifying share in an insurance company.
The prospective and/or incumbent executive directors and supervisory board members may be appointed by the General Meeting of Shareholders “subject to approval of the CBvS”.
What documents are required?
Under the Directive for the Suitability of Persons of Insurers, the following documents, among others, are required:
- A recent passport photo;
- An extract from the population register, maximum six months old;
- A copy of a valid identity document (ID card/passport/driving license) for residents;
- A copy of the relevant pages of the valid passport for non-residents;
- A declaration of nationality for non-residents;
- A statement from the Attorney General regarding the background check, not older than six months. If it concerns non-residents, a certificate of good conduct issued by the competent judicial authorities, clearly stating the date of issue.
- Proof of the highest education received (applicable to directors and supervisory board members).
In addition to the documents, the CBvS also requires each candidate to list two references in order to obtain more information about the respective candidates. The information is obtained by means of a questionnaire, which is sent to the listed references.
The assessment is carried out on the basis of the criteria included in the Directive for the Suitability of Persons of Insurers.