Deposit Insurance law, over a dozen bills pushed in last-minute rush

The leader of government business ushered over a dozen new Bills through the House of Assembly (HOA) for their first reading during the penultimate House sitting last week.

Premier Dr Natalio Wheatley amended the order paper during that sitting of the House to add the items.

Among the bills moved by the Premier and Minister of Finance were the Partnership (Amendment) Act, 2023; BVI Business Companies (Amendment) Act, 2023; Proceeds of Criminal Conduct (Amendment) Act, 2023; Securities and Investment Business (Amendment) Act, 2023; Financing and Money Services (Amendment) Act, 2023.

The House also heard the first readings for the Drug Trafficking Offences (Amendment) Act, 2023; Company Management (Amendment) Act, 2023; Banks and Trust Companies (Amendment) Act, 2023; Insurance (Amendment) Act, 2023; Financial Services Commission (Amendment) Act, 2023; and Limited Partnership (Amendment) Act, 2023.

Dr Wheatley also introduced the Elections (Amendment) Act, 2023; Counter-Terrorism (Amendment) Act, 2023; Criminal Justice International Co-Operation (Amendment) Act, 2023; Financial Investigation Agency (Amendment) Act, 2023; and Virgin Islands Deposit Insurance (Amendment) Act, 2023. 

Deposit Insurance Act

An explanation of the provisions of the various bills is generally given during the second reading which is most often done at a later sitting of the House after the Bill receives consultation with members of the public. However, the premier moved a motion to suspend the HOA’s rules to allow for the second and third readings of the Virgin Islands Deposit Insurance (Amendment) Act.

While he did not immediately offer an explanation for the addition of the large number of bills being introduced at the same time, the premier said that a number of bills were passed in a previous House session last year about other pieces of legislation, to accommodate for the Virgin Islands Deposit Insurance scheme.

”It is envisaged that a deposit insurance scheme would assist in the restoration and maintenance of confidence in the stability of deposit-taking institutions, and in achieving this objective, reduce the possibility of contagious deposit runs on these institutions,” the Premier said. 

According to Premier Wheatley, if such an incident were to occur, this could jeopardise the health of the financial system as a whole. He then explained that the government has made an initial $4 million guarantee to the establishment of the initiative. 

Dr Wheatley also related that the bill seeks to establish a deposit insurance corporation and fund which provides limited compensation to insure depositors under certain circumstances, offering protection for residents at the same time. 

Under the new law, persons are expected to be protected for up to the value of $100,000 the premier confirmed. He said this figure is expected to increase as the scheme grows. Previously, the premier said, if there was a bank failure, people would lose all their deposits. 

Dr Wheatley noted that, after the passage of the Deposit Insurance Act, lawmakers are hoping to lay regulations on the table in the HOA concerning the new law before the House is dissolved.

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