Durrant Pate/Contributor

Finance and the Public Service Minister Fayval Williams has disclosed that regulatory changes are coming to the insurance sector to tap billions of dollars in investment funding for corporate expansion, working capital and project financing.

This is part of a list of reforms that is coming to Jamaica’s financial sector, which has been asked for by securities dealers, insurance companies and pension funds, which want to unlock more of their funds for investments in the domestic economy. 

Opening the 2026/26 Budget Debate in parliament yesterday, Minister Williams declared, “the government will be beginning with a carefully calibrated package of regulatory reforms designed to mobilise pools of local institutional savings from pension funds and the insurance sector so they can play a greater, yet prudently governed, role in financing infrastructure, housing, energy and productive private sector investment.” 

These measures, Williams argued, are practical, evidence‐based and sequenced to protect financial stability while unlocking capital for growth. In focusing on the reforms for life insurers, which she cited as another critical source of long‐term capital, Williams disclosed that certain restrictions will be lifted, in particular Regulation 47 of the Insurance Regulation, which is interpreted too narrowly.

Restriction is being simplified

Under the current interpretation of Regulation 47, insurers may invest in corporate debt only where multiple prescriptive conditions are fulfilled simultaneously. This effectively restricts insurers to publicly listed, rated and collateralised securities, which represents a de facto exclusion of many otherwise creditworthy domestic issuers and constrains insurer investment returns and limits the development of the corporate debt market.

“To address this, we will simplify Regulation 47 so that insurers can invest in corporate debt where either of two objective criteria is met. The revised framework will permit investment where instruments are secured by adequate collateral and bear fixed interest; OR where instruments are issued, secured or guaranteed by a solvent company assessed to be investment grade by a recognised rating provider and that meets a two‐times fixed‐charges earnings test over the prior two years, Minister Williams told the House of Representatives.

She contended that this change preserves important safeguards while expanding the investable universe and encouraging a deeper domestic corporate debt market, pointing out that complementary reforms to support market functioning is also coming.

Complementary reforms coming

“These changes will be reinforced by a set of complementary reforms the regulator will advance in parallel. First, we will review the capital adequacy framework for securities dealers in an effort to remove any elements that discourage intermediation in government and high‐quality corporate securities. Second, we will introduce a risk‐sensitive concentration framework for securities dealers, pension funds and insurers that places greater emphasis on issuer quality and asset class rather than relying on blunt, uniform caps,” the finance minister said.

Third, the authorities will re-examine the repurchase agreements framework, with a focus on allowable assets and eligible collateral, and finally, they will look to reform collective investment scheme rules, exploring the efficacy of unit‐holder limits and liquidity management. 

Together, these measures, she insisted, will strengthen market functioning while protecting savers and policyholders.

“Taken together, these reforms seek to increase the flow of long‐term domestic savings into productive investment, deepen our capital markets, improve price discovery and liquidity, and strengthen the capacity of pension funds and insurers to meet long‐term obligations. They are aimed at lowering financing costs for infrastructure and private firms, support job creation, and contribute to a more resilient, diversified financial ecosystem,” Williams asserted.

“These proposals reflect a careful balance. We are removing unnecessary constraints that have kept capital idle, while embedding prudent governance and supervisory safeguards that protect investors, policyholders, pensioners, and the broader economy. With these measures, Jamaica will better mobilise its own savings to finance our development priorities and strengthen the foundations for sustainable growth,” she argued.