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Chief Executive Officer of the Jamaica Deposit Insurance Corporation (JDIC), Antoinette McKain, has said that deposit insurance coverage could soon be extended to beneficiaries of Trust accounts, as it seeks to provide the widest coverage possible.
“It’s important to note that we have it in draft and we expect this to be put before the Parliament for debate and acceptance; legislation that will actually see deposit insurance coverage being extended, not just to the Trustee of the Trust account, but also to each beneficiary in the Trust account,” Miss McKain said.
She was addressing the JDIC’s 10th anniversary Long Service Awards Luncheon, held on Wednesday (October 8), at the Alhambra Inn and Restaurant in Kingston.
Currently, the JDIC, which was established to protect depositors in the aftermath of the financial sector crisis in the 1990s, offers insurance coverage to depositors who hold a single account, a corporate account, a joint account, and the Trustee of a Trust account, but not its beneficiaries.
She pointed out that the deposit insurance system is wide and consistent with international best practices.
“We see that the deposit insurance system is wide in its scope, and that the coverage limit of $600,000 [per depositor per institution], actually covers in our system today, nearly 98 per cent of the deposit accounts. That’s pretty good coverage and we can tell you that this accords with international practices,” Miss McKain informed.
Comparing the JDIC’s $600,000 coverage, which amounts to US$8,000, to Trinidad & Tobago’s US$11,000, and Singapore and Malaysia’s US$13,000 to US$15,000, she argued that “Jamaica is not far off in terms of its relative position in how much it covers.”
“It’s also important to note that after 10 years, the Deposit Insurance system is a strong part of our financial system safety net. The surveys we have commissioned have shown increased depositor confidence in the financial system, and we are happy to be able to report this, particularly at this time, when depositors and other investors in the system are concerned about the US financial crisis,” she said.
“Also, after 10 years we can say that we have a Deposit Insurance Fund that is at a level that is consistent with international practices. Going forward, the JDIC will continue to foster depositor confidence in whatever way that is necessary. We will also review the coverage limit that we offer,” Miss McKain added.
She asserted that there is a strong financial regulatory system in the country that continues to hold its strength.