meta_id 3417437

On August 17, 2026, the Financial Services Commission of Jamaica (FSC) published a consultation paper on proposed Recovery Planning Guidelines for prescribed financial institutions and prescribed holding companies operating in the insurance and securities sectors. The guidelines are issued pursuant to the Financial Services Commission (Amendment) Act, 2024 and are informed by internationally recognised standards. Key points of the consultation include: Scope and proportionality: The Guidelines apply to all prescribed financial institutions and prescribed financial holding companies in the insurance and securities sectors. Recovery plans must be proportionate to the entity's size, business volume, complexity, risk profile, and systemic importance. Groups must prepare a single consolidated group recovery plan covering all prescribed financial institutions within the group, including domestic and foreign operations. Governance framework: The Board of Directors bears ultimate responsibility for the recovery planning process, including formal approval of the plan prior to submission and at each material update, and at least annual review through tabletop exercises or other simulation methods. Senior management is responsible for day-to-day development, implementation, and maintenance. A designated senior officer must serve as the primary FSC point of contact. The plan must be reviewed by an independent party, either internal audit or a qualified external party and the results reported to the Board annually. Required plan components: Recovery plans must contain eleven components: an executive summary; an overview of the financial institution and group structure; governance arrangements; identification of core business lines; identification of critical functions and critical shared services; assessment of material dependencies; recovery indicators and triggers; stress testing and scenario analysis; recovery options and impact assessment; communication and disclosure arrangements; and provisions for maintenance, testing, and material changes. Recovery indicators and triggers: Entities must establish a recovery indicator framework with clearly defined metrics, thresholds, and escalation procedures. Insurance sector indicators must cover at minimum capital and solvency, liquidity, asset quality, underwriting and claims performance, earnings and profitability, and operational factors. Securities sector indicators must cover capital and solvency, liquidity, asset quality, earnings and profitability, client asset protection, market risk exposure, and counterparty risk. Triggers must be calibrated above regulatory minimums to allow adequate time for remediation, and trigger breaches must be reported to the FSC within three business days. Stress testing: Recovery plans must include at least three stress scenarios: an idiosyncratic scenario specific to the entity; a system-wide scenario affecting the broader financial system; and a combined scenario. At least one scenario must assess a sudden and material deterioration in capital adequacy and at least one must assess a severe liquidity stress. Reverse stress testing may be used as a complementary tool. Recovery options: Entities must develop a diverse suite of recovery options spanning capital management, asset management, liability management, business strategy, liquidity management, reinsurance, and operational restructuring. Options must not be limited to easily implementable measures and must be cross-mapped to stress scenarios to identify gaps in recovery capacity. Notification requirements: Entities must notify the FSC within three business days of any trigger breach, activation of a recovery option, any event materially impairing the ability to implement the plan, or any material change to the entity's financial condition affecting plan assumptions. Submission and supervisory review: Recovery plans must be submitted annually. The FSC will assess completeness, effectiveness, credibility, and operationality, and may require resubmission where material deficiencies are identified. Entities must also submit a remedial plan setting out corrective actions and timelines. If adopted, the guidelines will take effect on the date of issuance, with regulated entities required to develop, obtain Board approval of, and submit a recovery plan to the FSC within twelve months of that date. Interested parties may submit comments to the FSC at respol@fscjamaica.org by September 16, 2026.