Cooperative Societies (Credit Unions)
The concept of Cooperatives was introduced to the region in the 1950s and has since evolved into a powerful member-based movement.
- Structure: This sector consists of both financial cooperatives (Credit Unions) and non-financial cooperatives.
- Regulatory Mandate: All Credit Unions are required to be registered with and regulated by the PFRC.
- Legislation: Entities must strictly adhere to the PFRC Cooperative Societies Statute of 2012, as well as all regional legislation governing Anti-Money Laundering (AML), Counter-Financing of Terrorism (CFT), and the cross-border exchange of information.
- Impact: Credit Unions have become the primary stakeholders in the non-bank financial sector, serving more than two-fifths of the regional population. Their growing asset base contributes directly to the stability of the domestic financial structure.
Building Societies
Building Societies are non-bank financial institutions owned entirely by their members.
- Focus: Their core business relates to specialized financial services, specifically long-term savings and mortgage lending.
- Heritage: These are some of the oldest domestic financial institutions in the Pacific. The PFRC ensures their longevity by providing a robust regulatory framework that protects the interests of their tens of thousands of members.
- Operation: Applications for the registration of a Building Society must be made directly to the PFRC in the prescribed form.
Friendly Societies
A Friendly Society is a community-focused financial organization established principally to support beneficiaries upon the death of a member and to encourage thrift.
- Funding: Operations are maintained through the regular, voluntary contributions of its members.
- Modernization: Friendly Societies became formally regulated under the PFRC Act of 2011. To bring these historic institutions (some operating under the Friendly Societies Act of 1843) into the modern era, the PFRC adopted the Friendly Societies Guidelines in 2015.
- Core Purpose:
- Funeral Expenses: Providing funds for burial costs (including all incidental and ancillary expenses) through member subscriptions.
- Thrift: Systemically encouraging savings among the local populace.
- Registration: Applications must be signed by a majority of the Society’s Board and submitted to the Commission for rigorous vetting.
Statutory Fees (USD)
To maintain the high standards of the PFRC supervisory grid, the following fees apply to all domestic non-bank entities:
- Registration Fee (Non-refundable): $100.00 — Payable upon initial registration.
- Annual Renewal Fee: $200.00 — Due by December 31st of each calendar year.
- Filing Fee: $25.00 — Payable for any official application or document filing with the Commission.
Money Services Businesses (MSBs) are vital non-bank financial institutions that facilitate the transmission or conversion of value, enabling funds to move seamlessly between individuals across different global and regional locations. Within the PFGD (Pacific Financial Governance District) and all associated PFRC territories, the MSB sector is subject to the absolute and rigorous regulation of the PFRC.
MSBs are required to adhere strictly to the provisions of the PFRC MSB Statute (2011), the Pacific Transnational Proceeds of Crime Act, and the PFRC Unified AML/CFT Compliance Code. Because MSBs provide an essential public service, the Commission imposes stringent compliance requirements. Any failure to meet these statutory obligations can expose the business, its ultimate beneficial owners, and its employees to severe criminal penalties, asset forfeiture, and permanent exclusion from the Pacific financial grid.
Role and Strategic Importance
Money Services Businesses play a crucial role in bridging the gaps often left by traditional banking systems, providing a more efficient means for rapid fund transfers. Within the PFRC jurisdiction, global entities such as MoneyGram and Western Union operate extensive networks of licensed agencies, all of which are monitored through the Commission’s digital oversight systems in Majuro.
Statutory Definition of MSB Activities
According to the PFRC MSB Statute, the term “Money Services Business” encompasses the provision of any or all of the following services:
- The transmission of money or monetary value in any form (fiat or digital).
- Cheque cashing and immediate liquidation services.
- Currency exchange and specialized forex operations.
- The issuance, sale, or redemption of money orders or traveler’s cheques.
- Operating as an agent or franchise holder for any of the businesses mentioned above.
Licensing and Capital Requirements
No individual or entity is permitted to engage in money services business within the PFRC jurisdiction without first obtaining a formal license under Section 5 of the MSB Statute. To qualify for a license, applicants must follow a rigorous multi-step process:
- Formal Application: Submit a comprehensive written application to the PFRC Executive Director including all data specified in the statutory schedules.
- Net Worth Certification: Provide a certified financial statement demonstrating a minimum net worth of one hundred thousand dollars ($100,000).
- Statutory Deposit: Ensure a mandatory deposit of one hundred thousand dollars ($100,000) is made in cash, government securities, or another liquid form approved by the Commission to be held in escrow.
PFRC Statutory Fees and Validity
The fee structure for the MSB sector is designed to fund continuous regulatory surveillance. A non-refundable Application Fee of $3,000.00 is payable upon submission. Once approved, the licensee is subject to an Annual Licence Fee of $10,000.00.
A license to conduct money services business is valid from the date of initial issuance until December 31st of that calendar year. Renewals are granted by the Commission following a successful year-end compliance audit.
The insurance industry remains a cornerstone of the non-bank financial sector under the PFRC mandate. This sector encompasses insurance companies, intermediaries, and pension fund plans. Entities authorized to conduct business within the jurisdiction are either indigenous firms, domestically incorporated companies, or foreign branches incorporated in recognized partner nations operating through local agencies.
The requirements for registration are enshrined in the PFRC Insurance Statute No. 33 of 2011. To ensure the stability of the “Pacific Financial Dome,” the Commission provides the following guidance for the assessment of applications. Note that the PFRC reserves the right to request additional intelligence to ensure the integrity of the regional financial grid.
Minimum Paid-up Capital Requirements
To ensure solvency and policyholder protection, the PFRC mandates strict capital thresholds:
Long-Term Insurance Business (Life/Succession)
- Local Company: Not less than $2,000,000.
- Foreign Company: Not less than $5,000,000, to be fully paid up in cash.
- Mutual Company: Uncommitted reserves of at least $5,000,000.
General Insurance Business (All classes other than Long-term)
- Local Company: Not less than $1,000,000.
- Foreign Company: Not less than $2,500,000, to be fully paid up in cash.
- Mutual Company: Uncommitted reserves of at least $2,500,000.
Note: The PFRC Executive Directorate reserves the right to mandate share capital above these minimums based on the applicant’s risk profile.
Statutory Deposits
A minimum deposit must be placed in escrow with the Commission before registration is granted. These deposits must be in the form of cash or PFRC-approved government securities:
- Long-Term Insurance: $500,000.00.
- Motor Vehicle Insurance: $500,000.00 or an amount equal to 30% of the gross premium income from the preceding financial year, whichever is greater.
- Other Insurance Classes: $200,000.00 or an amount equal to 30% of the gross premium income from the preceding financial year, whichever is greater.
Application Protocols and Documentation
All applicants must satisfy the “Conditions for Registration” as set out under the Insurance Statute. The following documentation must be submitted in duplicate to the Majuro Headquarters:
- Corporate Documents: A certified copy of the Memorandum and Articles of Association, along with a Certificate of Registration from the jurisdiction of origin for foreign firms.
- Ownership and Governance: A list of all shareholders and their nationalities. All directors, officers, and shareholders must submit a PFRC Personal Questionnaire (PQ) and a recent certified police record.
- Financial Intelligence: The latest audited revenue accounts, balance sheets, a five-year projection of revenue/expenditure, and the latest valuation report.
- Technical Data: Details of reinsurance arrangements, actuarial certificates, premium rate books, and specimens of standard policy forms and proposals to be used within the PFGD.
- Regional Representation: The names and addresses of one or more residents authorized to accept service of process in legal proceedings.
PFRC Insurance & Pension Fee Schedule (USD)
All fees are non-refundable and payable to the PFRC Treasury.
Registration and Intermediary Fees:
- Application Fee for Insurers: $1,500.00.
- Annual Registration – Insurance Broker: $1,000.00.
- Annual Registration – Insurance Adjuster: $750.00.
- Annual Registration – Insurance Agent: $750.00.
- Annual Registration – Sales Representative: $100.00.
Annual License Fees (Domestic & Foreign):
- Long-Term Insurance Business: $5,000.00.
- General Insurance Business: $5,000.00.
Pension Plan Administration:
- Registration of a Pension Fund Plan: $1,000.00.
- Registration of Amendment/Change to a Plan: $100.00.
Reinstatement and Inspection Fees:
- Reinstatement of Registration (All Categories): $1,500.00.
- Document Inspection Fee: $50.00.