JDIC Strengthens Ability to Undertake Mandate

During the 2006/07 fiscal period, the Jamaica Deposit Insurance Corporation (JDIC) continued to maintain a proactive stance, aimed at strengthening its ability to efficiently conduct payout to depositors.
“An integral component of this stance is the ability to continuously identify and implement process improvement initiatives which will serve to foster and maintain a heightened state of readiness,” the Corporation’s annual report for the period states. Through research on the experience of deposit insurers worldwide and ongoing assessment of the dynamics in the local financial market, the Corporation sought to undertake initiatives designed to enhance its ability to participate effectively in intervention in the sector. Chief among these were: an insured deposit portfolio transfer project, an intervention matrix review, a policy record-keeping requirements project, and the development of a business process documentation and training manual.
Under the insured deposit portfolio transfer project, the report notes, the JDIC sought to develop the institutional capacity to undertake insured deposit portfolio transfer. Under this arrangement, in the event of a policyholder failure, the depositor’s payment information is transferred electronically to another policyholder under an agency agreement.
This initiative comprised three major components, including documentation development, information systems development, and a series of simulated transfers in collaboration with policyholders.
The task of compiling project, policyholder, legal business process, and information and communications technology documentation continued during the review period, with plans to, during the second half of the 2007/08 financial year, re-open dialogue with policyholders with a view to developing the depositor data information system and undertaking the first of several simulations.
Meanwhile, an internal Intervention Matrix Review Committee was established to undertake a comprehensive review with respect to licensed financial institutions, as the JDIC sought to provide transparency and clarify accountability in the system of enforcement and intervention. In 2000 the safety net players signed a Memorandum of Understanding, which sets out the framework (intervention Matrix) for action by the players in rectifying problems which may emerge with respect to the viability of licensed financial institutions. The safety net players include: the Bank of Jamaica, the Financial Services Commission, the JDIC, and the Ministry of Finance and the Public Service.
The Corporation began an initiative during the review period designed to institutionalize record-keeping practices among policyholders that are conducive to timely and efficient payout. By the end of the year, the JDIC had completed a preliminary review of the related legislation locally and in other jurisdictions, and the practices of some of its policyholders. This initiative was expected to continue during the financial 2007/08 year, the report points out.
In recognition of the importance of well-documented procedures and training material during an intervention, the Corporation continued its on-going effort of developing and updating its training material and payout guidelines. “The Corporation has a statutory obligation to take all such measures as may be necessary to ensure that there is the least possible exposure to loss. In so doing, one of the measures necessary is to ensure the accuracy of the data used to effect a payout and to reduce the potential for adverse claims,” the document explains.