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FSM Banking and Insurance Board Holds First Quarter Meeting

Palikir, Pohnpei (FSM Information Services): June 24, 2010 - Under the leadership of President Mori's Administration, the FSM Banking and Insurance Board (the "Board") held its 1^st quarter meeting which began in Yap on June 10 and ended in Chuuk on June 17, 2010. The Board held discussions and organized public education sessions with the leadership and other stakeholders on the legal and regulatory framework for insurance and banking businesses; as well as undertook supervisory activities during the visits. The Board, comprising of Chairman Narruhn, Reed Oliver, and Joseph Habuchmai visited the States with two Commissioners and a legal counsel from the FSM Department of Justice.

This was the first time that the Board held its meetings and provided public educational programs in the State of Yap and Chuuk. During the programs held in Yap and Chuuk, the Board solicited views and comments from the States regarding financial sector supervision and regulation. The same activities were completed for the State of Kosrae in December 2009.

The Board, under Titles 29 and 37 of FSM Code (FSMC), has the duty to: (1) regulate banking and insurance business, (2) undertake the licensing and supervision of bank, insurers, insurance agents, insurance solicitors and insurance brokers, (3) protect the interests of depositors, insurance policy owners, and (4) promote the soundness, stability, and development of the banking and insurance systems in the FSM.

Additionally, while the Board is not directly responsible for the administration and implementation of Title 34 of FSMC, the Consumer Protection Act, it has nevertheless over the years assisted customers and the Department of Justice by ensuring that the banks are in compliance with its requirements.

The leadership and people in Chuuk and Yap were advised the banking system in the FSM is safe and sound from the regulatory point of view, despite the global financial crisis. On the insurance side, the Board informed participants that one broker, two captive insurance companies and three captive insurance managers, two of which are the biggest captive management firms in the world, have been licensed in FSM to date.

The Board further reported that it is working on licensing local agents and registering foreign insurers transacting insurance businesses in the FSM through local agents. The Board emphasized that under Section 301 of Title 37 of FSMC, no insurance business can be carried on in the FSM, unless such insurance business is appropriately licensed or registered.

For more information, please contact the FSM Banking and Insurance Board, P.O. Box 1887, Kolonia, Pohnpei, FM 96941, phone: (691) 320-2015 or 2064, fax: (691) 320-5433, email: fmbb@mail.fm.