Cashing In or Cashing Out? The Transfer of Insurance Business in Jamaica

Meaning of “Insurance business” 

Insurance business is the business of undertaking liability under a contract of insurance to indemnify or compensate a person in respect of loss or damage, including the liability to pay damages or compensation, contingent upon the happening of a specified event. In Jamaica, insurance business includes:

  1. the assumption of the obligations of any insurer in any class of business;
  2. the assumption of the business of insuring risks or liabilities;
  3. the renewal and issuing of documents of renewal of existing insurance and liabilities; or
  4. the receiving of first, subsequent or renewal premiums, and
  5. reinsurance.

An “insurer” is defined under the Insurance Act as a company carrying on insurance business and, except where otherwise stated, includes all the members of an association of underwriters which is registered as an insurer. 

 Transfer or Amalgamation? 
A person may wish to enter the insurance business by acquiring the existing portfolio of a company that is seeking to leave the Insurance business, or an existing company may choose to embark on a joint venture with another company that that may be looking for an injection of capital to meet the conditions of its registration. There may be several reasons for the transfer of insurance business from one insurer to another, however, because of the important role insurers play in our economy, special procedures have been put in place to protect insurance policy holders and other stakeholders in the event of an insurance business changing hands. 

The Insurance Act deals with both transfer and amalgamation of insurance businesses. Amalgamation occurs when an insurance business and one or more of the other companies registered in Jamaica under the Insurance Act enter into an agreement in which they combine their business, in whole or in part, with a view to continuing to carry on insurance business together. An amalgamation may involve the creation of a new entity altogether to manage the combined property, or the absorption of one company by the other. A transfer occurs where when one insurance company transfers control of its insurance business, in whole or in part, to another insurance company registered in Jamaica under the Insurance Act, or the acquisition of an existing registered insurance company by another. Both transfer and amalgamation are subject to the same general approval process. 


An insurance business may be transferred, acquired, or amalgamated, by taking the following steps: 

  1. The terms of the proposed transaction arrangement or agreement for the transfer or amalgamation of the insurance business must be approved by the shareholders of each affected company by way of a special resolution (generally requiring 21 days’ notice of the calling of the general meeting and ¾ of all members present and entitled to vote, voting in favour or a written resolution signed by all shareholders approving the transaction)
  2. After approval from the shareholders of the companies is obtained, an application for the approval for the amalgamation or transfer of the insurance business must be made to the Financial Services Commission (the “Commission”) by the company seeking to transfer its insurance business (the “transferor insurance company”) accompanied by the proposed agreement for purchase and sale which sets out the terms and shows how the transfer of the business will be affected.  
  3. The Commission will publish a notice in a newspaper with island-wide circulation, advising the public of the proposed arrangement;
  4. The Commission will review the proposed arrangement and set a hearing date for the application.
  5. At the hearing, the commission may reject the application, approve the arrangement unconditionally, or approve the arrangement subject to such conditions as it thinks appropriate; 
  6. After this initial approval is obtained from the Commission, the companies may proceed to give effect to the approved arrangement; 
  7. Once the transfer or amalgamation is completed the receiver of the insurance business (the “transferee insurance company”) must within 30 days from the completion of the transfer or amalgamation give the Commission: 

(a) certified copies of statements of the assets and liabilities of the companies concerned in the amalgamation or transfer, together with a statement of the nature and terms of transfer;
(b) a certified copy of the agreement or deed under which the amalgamation or transfer is effected;
(c)a declaration signed by the secretary or manager, if any, and at least two directors of the company that to the best of their belief-

  • every payment made or to be made to any person on account of the amalgamation or transfer is fully set out in the declaration; and
  • no payments other than those set out have been made or are to be made in connection with the amalgamation or transfer by or with the knowledge of any parties to the amalgamation or transfer.

    8. The Commission will review the documentation submitted and communicate with the applicants in writing if they have a concern regarding the transfer or amalgamation, and if none, will give its further approval to the transfer or amalgamation. 

    9. After, the Commission has given its further approval, the transferee insurance company must make an application to the Minister of Finance for an order stating that the property has been transferred and vested in the transferee insurance company in accordance with the arrangement approved by the commission.   

Fit and Proper 

Where an application is made to the Commission for the approval of any transaction, arrangement, agreement or transfer by virtue of which effective control of an insurance business would be acquired by another person or company, the Commission will not give approval unless it is satisfied that each of the persons managing or controlling the transferee insurance company is a fit and proper person to manage or control an insurance company.

A fit and proper person for these purposes is a person who:

  1. Has not been convicted of an offence involving dishonesty 
  2. Is not an undischarged bankrupt
  3. The Commission has no reasonable cause to believe has committed any act involving dishonesty or impropriety in the handling of insurance business 
  4. In the Commission’s opinion, is able to exercise competence, sound probity, sound judgement and diligence in fulfilling his responsibilities in relation to the insurance business. 

In the case of an amalgamation, upon the Commission’s final approval of the amalgamation, the existing registration of both the transferring insurance company and the transferee insurance company, in respect of the classes of insurance business in which each of them is registered, is cancelled, and the application is treated as a first registration by the newly amalgamated transferee insurance company. 

In the case of a transfer, where the transferee insurance company has merely acquired additional insurance business within the classes of insurance business in respect of which it is already registered with the Commission, the transferee insurance company will continue to carry on the acquired business pursuant to its existing registration, subject to whatever conditions the Commission may have imposed as a condition for approval of the transfer. Additionally, to the extent that the transferor insurance company retained a portion of their business, the transferor insurance company may continue to carry on such insurance business pursuant to its registration. Alternatively, if the transferor insurance company had transferred all of its business, then it could proceed to wind-up its operations in Jamaica. A process which may be the subject of another article.

Luke Phillips is an Associate at Myers, Fletcher & Gordon, and is a member of the firm’s Commercial Department. Luke may be contacted via or This article is for general information purposes only and does not constitute legal advice.

This article is for general information purposes only and does not constitute legal advice.

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