business@tribunemedia.net
THURSDAY, MAY 25, 2023
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Insurer uproar on Gov’ts 50% investment ‘dictate’ By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net BAHAMIAN insurers yesterday blasted the Davis administration for seeking to “dictate” their investment strategy by mandating that a “minimum” 50 percent of their total portfolio be held in government securities. The Bahamas Insurance Association (BIA), in a letter issued yesterday to the sector’s regulator, warned it has “grave concerns” with a proposal - seemingly suggested by the International Monetary Fund (IMF) - that could ultimately “lead to the collapse of the industry” by disrupting its ability to match assets, and the returns they generate, with its liabilities as they mature. The industry body also argued that mandating insurers hold at least half
• Sector warns proposal will cause ‘collapse of industry’ • Regulator’s letter says suggestion came from the IMF • Industry warns of ‘false market’, ‘rate fix’ on Gov’t debt their investments in government paper will create “a false market” for these securities, as well as lead to potential “rate fixing” and the “creation of a pricing monopoly” in the Bahamian dollar debt market. The BIA hit out in response to a letter from Michele Fields, the Insurance Commission of The Bahamas’ superintendent, which gave the insurance industry just six days to provide feedback on a proposal which - if implemented - would require
both life and health and property and casualty underwriters to meet the “minimum” 50 percent threshold within two years. Mrs Fields, in the May 19, 2023, letter to all “registered domestic insurers”, wrote: “The Government of The Bahamas is considering the imposition of a mandatory minimum holding of government securities by regulated insurance companies. We have been informed that the International Monetary Fund has
recommended this course of action to the Ministry of Finance. “The Government is suggesting a minimum holding of 50 percent of its assets to be held in government securities. It would allow a transition period of 24 months for companies to attain this minimum threshold. The Commission has not determined how the minimum holding would be calculated. “However, it is being considered that it be based on the statutory funds held in accordance with section 45 of the Insurance Act 2005. The Commission has conducted a benchmark in consideration of this proposal, and has found that one jurisdiction imposes this requirement in which the calculation is based upon minimum required capital/surplus.”
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Corporate income tax is ‘wrong way around’ By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE OPPOSITION’S finance spokesman yesterday argued that The Bahamas has corporate income tax “the wrong way around” because the proposed reform options are forecast to suck “more money” from the private sector via taxation. Kwasi Thompson, former minister of state for finance, also told the House of Assembly that the Opposition “cannot support increasing taxation” - as envisaged by all four corporate income tax options in the Government’s ‘green paper’ - without the Davis
KWASI THOMPSON administration producing a plan to eliminate “unnecessary spending”. Speaking as the House debated legislation to amend the International Business Companies (IBCs) and Exempted Liability Partnership Acts, so as to
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Gov’t digs in for 25% mining profits share By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net LEGISLATION that will create a new regulatory regime for mineral mining and exploration, and features a “minimum” 25 percent profit sharing with the Government, was tabled in the House of Assembly yesterday. The Mining Bill 2023, which will create a Department of Mining to oversee the industry if passed into law as-is, stipulates that “all rights of ownership in, and control of, minerals” automatically vests in the Government regardless
of whether the land upon which they are discovered is privately owned. The Bill, which appears to be an effort to provide greater regulation over The Bahamas’ natural resources, and to ensure a greater share of the proceeds go to the benefit of the Government and Bahamian taxpayers, bans mineral prospecting without possessing the proper approvals and licences and threatens fines of up to $150,000 and two-year prison terms for violators. While no industries are specified in the Bill, it will likely apply to aragonite,
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Ex-MP says: ‘Gov’t supporters trying to get hands on GBPA’ By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net A FORMER MP yesterday doubled down on concerns that “supporters of the governing party have been trying to get their hands on the Grand Bahama Port Authority” amid push back to calls for politics to be kept out of Freeport’s future. Frederick McAlpine, the ex-Pineridge MP and senator, declined to name the “supporters” he referenced in yesterday’s statement when contacted by Tribune Business. However, he added that “there’s a former person in the Port [Authority] also trying to get involved”. Again, it was unclear who he was referring to as Mr McAlpine resolutely refused to give names. However, multiple sources have suggested that Hannes Babak, the former Grand Bahama Port Authority (GBPA) and Port Group Ltd chairman, who is known to be close to the Prime Minister, is playing a
FREDERICK MCALPINE key role behind the scenes as efforts to resolve the future of Freeport’s quasigovernmental authority and the wider city intensify. Mr McAlpine, in a statement to this newspaper responding to Fred Mitchell, minister of foreign affairs and the PLP’s chairman, renewed his opposition to the Government acquiring the GBPA - or partnering with a private company such as Mediterranean Shipping Company (MSC) to do so - for fear that the arrangement would be infected by politics.
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