Some countries in the region have been upgrading their banking legislation but the situation is not as promising with regard to insurance legislation, which remains woefully outdated in the entire region. This must be seen against the background that both the Jamaican financial crisis of the late 1990s and the Clico/BAICO regional crisis originated in the insurance sector.
In principle, strengthened, harmonized legislation would be the ideal to forestall regulatory arbitrage. However, the obstacles faced by the CARICOM Model Financial Institutions Bill clearly demonstrated the potential challenges likely to face any kind of harmonized financial legislation. Countries in the region also need to upgrade financial sector supervision, including the introduction of consolidated supervision.