Raphael John-Lall

?RAPHAEL JOHN-LALL

Mo­tor and Gen­er­al In­sur­ance Com­pa­ny was sus­pend­ed from car­ry­ing out most of its op­er­a­tions yes­ter­day by the Cen­tral Bank, said Carl Hi­ralal, In­spec­tor of Fi­nan­cial In­sti­tu­tions.

"Ear­li­er this morn­ing, the Cen­tral Bank took reg­u­la­to­ry ac­tion and in­ter­vened to pro­tect the pol­i­cy­hold­ers by sus­pend­ing the op­er­a­tions of Mo­tor and Gen­er­al In­sur­ance Com­pa­ny Ltd.

The sus­pen­sion is for an ini­tial pe­ri­od of 60 days. Based on the re­sults of our mon­i­tor­ing, this has be­come a nec­es­sary step to pro­tect pol­i­cy­hold­ers."

Hi­ralal made this dis­clo­sure yes­ter­day at the Fi­nan­cial Sta­bil­i­ty Re­port mid-term re­view at the Cen­tral Bank, In­de­pen­dence Square, Port-of-Spain.

Giv­ing rea­sons why this ac­tion was tak­en, Hi­ralal said the com­pa­ny did not com­ply with ba­sic reg­u­la­tions.

"They have prob­lems with the fil­ing of their statu­to­ry re­turns with the Cen­tral Bank. The 2007 to 2008 re­turns were filed late and were filed in­cor­rect­ly, and we have had to re­ject those re­turns. That makes it dif­fi­cult for the reg­u­la­tor to as­sess the fi­nan­cial po­si­tion of the com­pa­ny.

Statu­to­ry fund

"We were ad­vised that the com­pa­ny would be able to file their 2009 re­turns, which is due June 30. Even the cur­rent re­turns would not be com­ing in time. The com­pa­ny has al­so had prob­lems fund­ing the statu­to­ry fund.

"The com­pa­ny has not com­plied ful­ly with our re­quest and this puts pol­i­cy­hold­ers in jeop­ardy," he said.

He said the sus­pen­sion yes­ter­day oc­curred at all of the com­pa­ny's lo­cal of­fices.

"As far south as Point Fortin, New Grant and as far East as San­gre Grande. There are 11 of­fices in Trinidad and one in To­ba­go, and one branch in the Cay­man Is­lands. We are li­ais­ing with our coun­ter­parts in the Cay­man Is­lands with re­gards to the op­er­a­tion of this for­eign branch."

Hi­ralal said help was al­so brought in from the pro­fes­sion­al ser­vices firm, Price­wa­ter­house­C­oop­ers, for the in­ves­ti­ga­tion.

"In or­der to help us with the su­per­vi­so­ry ac­tion that was tak­en, we have en­gaged Bri­an Hack­ett, di­rec­tor of Price­wa­ter­house­C­oop­ers Ltd, to as­sist the Cen­tral Bank with the per­for­mance of our func­tion dur­ing our pe­ri­od of sus­pen­sion.

Tem­porar­i­ly sus­pend­ed

"What this means is that the busi­ness of this com­pa­ny has been tem­porar­i­ly sus­pend­ed in or­der to al­low the Cen­tral Bank to go in and car­ry out a full and prop­er as­sess­ment of its fi­nan­cial con­di­tion.

"To this end, the reg­u­la­tor is al­lowed, un­der the Act, to take all such mea­sures that may be nec­es­sary to pre­vent the con­tin­u­a­tion of Mo­tor and Gen­er­al In­sur­ance Com­pa­ny's busi­ness dur­ing this pe­ri­od of sus­pen­sion.

"This in­cludes as­sum­ing man­age­ment of the com­pa­ny and sus­pend­ing the board of the com­pa­ny. The In­spec­tor is al­so em­pow­ered to take charge of the books, records and oth­er doc­u­ments of the com­pa­ny and to pre­serve the as­sets of the com­pa­ny," he said.

He out­lined the ac­tiv­i­ties that the com­pa­ny will not be able to en­gage in dur­ing the sus­pen­sion.

"This means dur­ing the sus­pen­sion pe­ri­od, the com­pa­ny can­not write any in­sur­ance busi­ness, in­clud­ing used and re­new­al busi­ness, can­not ad­ver­tise and mar­ket its com­pa­ny. How­ev­er, ex­ist­ing poli­cies re­main in force. Dur­ing this brief sus­pen­sion, claims will not be processed," he said.

"Sus­pen­sion of a com­pa­ny's op­er­a­tions un­der Sec­tion 68 (1) of the In­sur­ance Com­pa­nies Act is not a re­ceiver­ship or liq­ui­da­tion. It is putting the com­pa­ny in­to a tem­po­rary hold­ing po­si­tion to al­low the Cen­tral Bank to have the ac­count­ing records up­dat­ed."