JDIC Increases Deposit Insurance Coverage

As of July 1, the maximum deposit insurance coverage provided by the Jamaica Deposit Insurance Corporation (JDIC), for funds deposited in Bank of Jamaica (BOJ) – regulated financial institutions, will be increased from a maximum of $300,000 to $600,000. This announcement was made by Chief Executive Officer (CEO) of the JDIC Antoinette McKain, while making a presentation at a Financial Services Commission (FSC) public forum, which was held at the Wexford Court Hotel in Montego Bay, on Tuesday, May 29. The forum, which was held under the theme ‘Think and check before you invest’, was the first in a series to be held across the island by the FSC.
Outlining that the Deposit Insurance Act was passed in 1998, and that the JDIC was established under that Act as an independent statutory body, Ms. McKain explained that the Corporation’s primary role under that Act is to manage a deposit insurance scheme and to protect depositors from loss. “But there are some conditions on that protection. One of the main conditions is that the scheme is for a limited guarantee – that is we cover only up to a certain amount of the depositor’s funds. Currently it is $300,000 and as of the first of July we will provide a maximum coverage of $600,000 per depositor per institution,” she informed. She pointed out that a depositor is classified in the context of the legal person, which could be an individual, the joint holder, the corporate person or a trustee.
Speaking against the background of the theme of the forum, Ms. McKain emphasized that the regulatory bodies do not manage nor can they take responsibility for managing deposit-taking institutions, and as such depositors need to monitor the institutions in which they have deposited their money, and also seek as much information as is readily available about these institutions.
She stated that using the figures for deposits as at December 2006, with the $300,000 insurance limit approximately 96% of the number of accounts within the deposit taking institutions islandwide are fully covered.
“Now when we move to $600,000 on the first of July, using the same deposits in the system up to December 2006, actually approximately 98 per cent of deposit accounts are covered. So that is pretty good, we are covering most of the smaller depositors in the system, and the dollar value of the total deposits will be about 36 per cent”, she stated.
Ms. McKain expressed the view that with that level of coverage the JDIC could safely be considered to be carrying out its objective of covering the island’s small depositors.
Other presenters at the forum were Deputy Executive Director of the FSC, George Roper; General Manager of the Jamaica Stock Exchange Marlene Street-Forrest; and Director, Financial Institutions Supervisory Division at the BOJ, Arlene Stephens.