IN March, five Pacific Islands Countries – American Samoa, Fiji, Marshall Islands, Samoa and Vanuatu – suddenly found themselves on the European Union’s revised list of noncooperative jurisdictions for tax purposes, otherwise widely known as the EU tax blacklist.
The revised list was released after a meeting of the Council of the European Union in Brussels in early March and punishes countries that maintain what the EU considers to be “harmful” tax incentives in their list of tax giveaways.
The list has had its share of criticism from some countries, who label it as an almost draconian move that ignores the economic realities on the ground in each of these countries.
International lawyer John Ridgway, Head of Legal Services, Pacific Legal Network (PLN) Australia, is also critical of the EU’s decision. Ridgway, who is a Reserve Bank of Fiji licensed Investment Advisor Representative and a former Chairman of the Vanuatu Financial Centre Association, spoke to Islands Business on the issue.
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BSP Life investment portfolio is now valued at $660m (USD315.29m), positioning the life and health insurance provider as one of the largest leading institutional investors in the Pacific.
And the insurance company believes its numerous public awareness campaigns held throughout Fiji’s main centres on the importance of having an insurance policy were paying off now.
Last month, BSP Life, allocated F$21.4m (USD$10.2m) in bonus to its customers.
This brings total bonus allocations for the last three years to $53.8m (USD$25.7m).
BSP Life’s Managing Director Malakai Naiyaga said they are delighted to officially announce the 2017 bonus allocation for their policyholders which was an increase from $19.8m (USD$9.47m) in 2016 and $18.7m (USD$8.94m) in 2015.
This bonus allocation will add further value to customer’s policies and will assist them with future financial plans, said Naiyaga.
The year-on-year increases demonstrate BSP Life’s strong commitment to maximising returns for policyholders.
BSP Life has more than 80,000 policyholders, over 100,000 policies and 140 professional advisors licensed by the Reserve Bank of Fiji, plus broker partners to provide tailored solutions to customer needs as well as 10 Customer Service Centres Fiji-wide.
“We will continue to seek innovative ways to sustain this to encourage all existing policyholders to maintain their life insurance policies with us and to also attract those who have never taken up life insurance policies.”
BSP Life is the only insurer in Fiji that allocates two types of bonuses; one is the reversionary bonus and the other is a terminal bonus.
Reversionary bonus is allocated from returns of BSP Life’s investment portfolio and has remained at 2% of the sum insured plus accumulated bonuses and is applied on a compounding basis. This generates better value for customers compared to simple bonuses.
Terminal Bonus on the other hand is a loyalty reward, based on the number of years the policy has been with BSP Life. The terminal bonus rate for 2017 is 0.65% increasing from 0.55% in 2016. Terminal bonus is added when the policy is paid out.
Naiyaga explained that bonuses were important for policyholders as they added value on the policies which in turn increases the payouts at maturity or in the event of untimely passing of the life insured, to beneficiaries.
“Fiji is one of a few countries in the world that still offers policies with an investment or savings benefit and we have found that these products are attractive due to the absence of a fully-fledged investment market where individuals can invest. We hope that people will continue to see their importance as vehicles for savings and capital formation,” added Naiyaga.
He commended policyholders for their loyaty to ensuring premiums were paid on time for the duration of the policy allowing it to accumulate value for them and providing valuable returns at important stages of their lives.
“It’s delightful to see many Fijian households benefiting from their bread winners’ investment in a BSP Life insurance policy. We view life and health insurance as an essential and integral part of one’s financial planning.”
“As Fiji’s leading life and health insurance provider it is our firm belief, now more than ever, that insurance is a need and no longer a want. Our view is that life and health insurance are essential components of good financial planning, providing safeguards for families in the event of untimely death, medical treatment due to a chronic illness, as well as future life needs.
“With the prevalence of NCD’s and low level of retirement funds for most of our people, BSP Life’s policies can assist in putting aside a small contribution every week, fortnight, or month to build a fund that will support those needs.”
Naiyaga further added: “We take great care to be there when our policyholders need us most. Our ability to allocate these large bonuses and benefits year-on-year is underpinned by our strong financial standing. We have a stable, balanced and growing investment portfolio, sound governance processes and internationally recognised actuarial expertise to ensure we can deliver on our promises now and in the future. We take this responsibility seriously.
“Our message is simple, it pays to have life and medical insurance and you can trust BSP Life to honour its commitments.”
BSP Life MD concluded: “We thank our policyholders for their confidence in us and can assure them and prospective new customers that we are committed to honouring this trust.”
Formerly owned by the Commonwealth Bank of Australia and operating as Colonial Life & Health, the company was acquired by Bank South Pacific of Papua New Guinea in November 2009 and rebranded BSP Life in 2011.
Expect new money (new credit) into Fiji’s financial system when the new commercial French owned Bred Bank begins operation in Fiji in September. Also expect the lowering of interest rates. That’s the word from Vanuatu’s banking sources, where Bred Bank is already operating. “The history of Bred Bank in Vanuatu was that it came in with fresh money and it is likely they will do the same in Fiji ,” said a Vanuatu banking insider.
Fiji Bank and Finance Sector Employees Union secretary Pramod Rae welcomed the new bank’s inclusion, particularly the fact it would be hiring locals. “Fiji is a big banking market and their entry into Fiji will create a lot of competition and I think customers will be seeing a drop in bank fees and rates. For this, we certainly welcome them here.” University of the South Pacific economist Professor Biman Prasad said the entry of the new bank should be welcomed. “This is not likely to affect the role of leading banks such as ANZ and Westpac, but it could add to the variety of products available to customers,” Prasad said. “Fiji is still a leading economy despite our poor growth over the last five years. Our banking industry is sound and stable.
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It’s been 19 years since former police and quarantine officer Frederick C. Ngeskabei retired, that’s why he was shocked and frustrated to receive on May 2012 a letter from the Commonwealth of the Northern Mariana Islands (CNMI) Retirement Fund saying he has to pay back $225,000 in alleged overpayment since he started receiving his bi-monthly pension.
Retired police major Antonio O. Kiyoshi, now with disability and living in Arizona, finds himself in a similar situation, having been asked to return almost $93,000 in overpayments. Ngeskabei and Kiyoshi are just two of the 120 retirees that are being asked to pay back the Retirement Fund a total of approximately $5 million. This aggressive push to recover $5 million in overpayments from retirees as a result of the pension agency’s own misapplication of the law prior to 2001 is just the latest in a string of controversies hounding the cash-strapped NMI Retirement Fund.
A combination of factors has been running the pension agency to the ground. These include overpayment of benefits, the CNMI government’s non-payment of enough money into the Retirement Fund yet burdened it with costly add-ons, and alleged receipt of bad investment advice from its adviser, Bank of America Corp’s Merrill Lynch. The CNMI government owes the Retirement Fund over $300 million in unpaid employer contributions.
“The CNMI’s retirement program is one of the most luxurious on American soil,” CNMI Representative Joseph Palacios (R-Saipan) told Islands Business. Citing figures from the Executive Branch, Palacios said the average government pension in the CNMI is $20,000 a year. In the U.S., it is only $10,000, he said. Palacios also said a retired judge in Hawaii gets as little as $40,000 or less a year but in the CNMI, retired judges and justices receive $80,000 to over $100,000 a year. Even spouses and children of deceased retirees in the CNMI also get benefits.
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