GARFIN Amendment Act draws fiery debate in Parliament

Parliament took an interesting turn on Friday when the Opposition New National Party voted along with two Members of Parliament on the Government side to kill the Insurance Amendment Bill (2012) designed to introduce a sort of reserve requirement ratio for insurance companies wishing to do business in the Spice Isle.

Finance Minister Nazim Burke

Minister for Finance Nazim Burke upon the Bill’s second reading insisted that in view of the fact that the financial sector has been bombarded with incidents of folding financial institutions, which resulted in intolerable losses for the public and investors, Government felt that it had become necessary to institute a clause which makes it mandatory for companies doing business in Grenada to make a deposit of EC$500,000, to the Grenada Authority for the Regulation of Financial Institutions (GARFIN)  designed to serve as a safety net.

Pointing to the CLICO and British American debacle and the SGL saga that left thousands of Grenadians without their life savings and pensions, Hon. Burke noted that the Government owed a duty of care to its citizens to try and provide in some way for that eventuality, and even to prevent it.

The Finance Minister said the Amendment sought to provide for the citizens and investors, that necessary recourse, that the Government had been burdened with for the past four years.

In his opposition to the Amendment, Leader of her Majesty’s Opposition Dr. Keith Mitchell, sought to point out that in these hard economic times, the government was seeking to place an additional burden on its population, an argument countered by the Leader of Government’s Business Nazim Burke who commented that it was better to spend one dollar extra to protect your hundred dollars, rather than wake up one day and find it altogether gone.

Member for St. George’s South East Karl Hood, in his stated opposition of the amendment, felt that it “made no sense.”

In the end, when the matter was put to a vote and a division of the House requested by the Opposition, the Bill was defeated 6 votes to 5, with Prime Minister Tillman Thomas, Ministers Nazim Burke, Patrick Simmons, Dennis Lett, Alleyne Walker voting in the affirmative, and Opposition Leader Dr. Keith Mitchell, and Members Roland Bhola, Dr. Clarice Modeste-Curwen, Elvin Nimrod voting in the negative with help from Government Members Michael Church and Karl Hood who echoed Opposition sentiments. It was the introduction of the GARFIN Amendment Act 2012 that saw the House’s dissension into overheated debate, when the Opposition Leader’s contributions on the matter were interrupted by Finance Minister Burke on a point of order.

Dr. Mitchell prefaced his contributions by intimating that the GARFIN Bill sought to introduce through the back door, the regulations that were shot down by the earlier vote, and it was on this point that the Finance Minister rose to make his declarations.

According to Minister Burke, the GARFIN Bill only sought to do two things, the first of which was the removal of “duplicitous” legislation already contained in the “Money Bill” and the second was that it sought to make the principals of an offending company criminally liable for any nefarious dealings resulting in the loss of investor funds.

Burke said that he found it offensive that the Opposition Leader would suggest any ulterior motive when the preceding vote was clear, in striking dead a bill designed to regulate an industry fraught with perils, especially in the face of a financial crisis.

The Leader of Government Business reminded the House that whilst the vote spoke for itself, the actions of those that voted will be judged by a public, who would have suffered the ills of non regulation.

All but insisting that their action was not a vote against regulation, but against a bill they thought was designed to increase the financial burden on the public, the very members offered no objection to the passage of the Bill, in a debate that saw the Speaker of the House having to speak severely to several members on the issue of conduct during contributions by other members.

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