Gov’t Easing Process for Life Insurance Companies to Invest In Corporate Debt

The Government will be taking steps to simplify Regulation 47 of the Insurance Regulation, to make it easier for life insurance companies to invest in corporate debt.

Minister of Finance and the Public Service, Hon. Fayval Williams, made the disclosure as she opened the 2026/27 Budget Debate in the House of Representatives on Tuesday (March 10).

Mrs. Williams said life insurers represent an important pool of long-term capital, but current rules restrict how those funds can be invested.

“Under the current interpretation of Regulation 47 of the Insurance Regulation, insurers may invest in corporate debt only where multiple prescriptive conditions are fulfilled simultaneously,” she explained.

She noted that the current framework effectively limits insurers to publicly listed, rated and collateralised securities, which excludes many creditworthy domestic issuers and constrains the development of the corporate debt market.

“This de facto exclusion of many otherwise creditworthy domestic issuers constrains insurer investment returns and limits the development of the corporate debt market,” Mrs. Williams said.

She noted that the change will create a new source of long-term local financing for businesses.

“It creates a meaningful new source of patient, long-dated local financing under the two phases given projected asset growth that can be deployed into corporate expansion, working capital, and project finance,” the Minister said.

Mrs. Williams said the revised framework will permit investment where instruments are secured by adequate collateral and bear fixed interest, or where the 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.

“This change preserves important safeguards while expanding the investable universe and encouraging a deeper domestic corporate debt market,” the Minister said.

Meanwhile, Mrs. Williams informed that these changes will be reinforced by a set of complementary reforms [that] the regulator will advance in parallel.

These include a review of the capital adequacy framework for securities dealers to remove elements that discourage intermediation in government and high-quality corporate securities.

Other measures include introducing a risk-sensitive concentration framework for securities dealers, pension funds and insurers, re-examining the repurchase agreements framework, and reviewing rules governing collective investment schemes.

“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,” Mrs. Williams said.

“With these measures, Jamaica will better mobilise its own savings to finance our development priorities and strengthen the foundations for sustainable growth,” she added.