TCI NIB Annual Report 2019-2020

BUILDING RESILIENCE: Charting the Way F ward Annual Rep t 2020 FINANCIAL YEAR



ANNUAL REPORT 2019 - 2020 Table Of Contents 2 Vision, Mission, Core Values 3 Corporate Information 4 Board of Directors 5 Committees of the Board 6 Minister’s Remarks 7 Chairman’s Remarks 8 Management Team 9 Supervisory Team 10 Operations Report 14 Registrations 16 Contributions 18 Benefits 23 Investments 26 Human Resources 40 Statement on Internal Control 42 2020 Financial Statement 1

Vision “ThSeoNuInBdwPirllobveidtehreoMf SoosctiCaal rSiencgu, rTirtuysSteedrv,iFciessc”a.lly Mission Transpar“eTnotBaendFiEsxccaelllylePnrCtuSdoecnitaeilnSVtehceuarPirtloyuvSiseeirosvnicoefsDtoepoeunrdBaebnlee,ficiaries.” UCPRANROITIFNYEGSOSFIOPNURALPOSE INTEGRITY TRREALINASBPLAERENT

C p ate Inf mation OFFICE LOCATIONS HEAD OFFICE – GRAND TURK PROVIDENCIALES OFFICE Headley Durham Building Hon. Hilly A. Ewing Building P.O. Box 250 1292 Leeward Highway Church Folly, Grand Turk P.O. Box 283 Providenciales Tel. No: (649) 946-1045/8/9 Tel. No: (649) 941-5806/5906 Fax: (649) 946-1362 Fax: (649) 941-5854 Email: [email protected] NORTH CAICOS OFFICE SOUTH CAICOS OFFICE Lewis Cox Building High Rock Andrews Street Bottle Creek South Caicos North Caicos Tel. No. (649) 946-3280 Tel. No. (649) 946-7200 Fax: (649) 946-3664 AUDITORS KPMG Ltd. BANKERS FirstCaribbean International Bank (Bahamas) Limited Scotiabank Turks and Caicos Ltd. Turks and Caicos Banking Company Limited

ANNUAL REPORT 2019 - 2020 Board of Directors SAMUEL SWANN EZRA TAYLOR Chairman Deputy Chair Insured Person Representative ATHENEE HARVEY - BASDEN FLOYD SEYMOUR DARCEL SMITH-THOMAS PS Finance Government Representative Government Representative Insured Person Representative ALVIN GARLAND SHARON BEEN RHESA CARTWRIGHT Employer Representative Employer Representative Acting CEO 4

ANNUAL REPORT 2019 - 2020 Committees of the Board AUDIT COMMITTEE Darcel Smith-Thomas Chairman Samuel Swann Member Sharon Been Member HUMAN RESOURCES COMMITTEE Alvin Garland Chairman Samuel Swann Member Athenee Harvey-Basden Member Rhesa Cartwright Acting CEO (Ex-officio Member) Susan Malcolm Human Resource Manager (Ex-officio Member) INVESTMENT COMMITTEE Floyd Seymour Chairman Samuel Swann Member Darcel Smith-Thomas Member Kenrick Walters Member Sandy Lightbourne Member Member Audley Higgs Acting CEO (Member) Rhesa Cartwright Investment Manager (Ex-officio Member) Diandra Mills BUDGET COMMITTEE Ezra Taylor Chairman Sharon Been Member Samuel Swann Member Rhesa Cartwright Acting CEO (Member) Marie Smith Financial Controller (Ex-officio Member) GRIEVANCE COMMITTEE Samuel Swann Chairman Athenee Harvey-Basden Member Dr. Hubert Fulford Member Pastor Bradley Handfield Member Alvin Garland Member TENDER COMMITTEE Ezra Taylor Chairman Samuel Swann Member Member Sharon Been Acting CEO (Ex-officio) Rhesa Cartwright 5

Minister’s Remarks It is indeed my pleasure to greet you once again as the Minister with responsibility for National Insurance and to also report on my efforts during the year with regard to the institution. Our National Insurance Plan provides a wide range of benefits to the populace. The institution has done a good job of providing social protection for the peoples of the Turks and Caicos Islands from its inception. Just as times are changing, my government recognizes that there is also a need to review our National Insurance benefit package. One key benefit recommended by the ILO convention 105 is the unemployment benefit. On coming to office, we pegged as a goal the introduction of an Unemployment Benefit. We commissioned an Actuarial Report as an initial step towards this goal. The National Insurance Board conducted consultations countrywide. While the majority of those attending the meetings supported the initiative, the idea of implementing an unemployment insurance had to be considered amongst competing priorities and in the context of a number of institutional reviews throughout Government that would have had cost implications not only for the entities in question, but the general public on a whole. For this reason, the matter was held in abeyance recognizing that a new benefit comes at an increased (rate) cost. The 9th Actuarial Review of the National Insurance Board was laid in House of Assembly on November 18, 2019. Members of the House and the public at large were appraised of some of the key recommendations of the report. The report signaled the need for parametric reform. While the recommendations must be considered in the wider context of the economy, it is clear that both contribution and benefit reform are inevitable. The recommendations of the review are under consideration. I was pleased to approve several business cases for the National Insurance Board during the year. I was particularly happy to approve the new virtual server network. Such an initiative is the initial step in progressing towards the long awaited new social administration enterprise system. This new system is expected to revolutionize the way the NIB conducts business with its various stakeholders, making its services truly accessible online. I was delighted to lead the Turks & Caicos delegation to the World Social Security Forum during the year; I found the experience rewarding. The National Insurance Board continues to be one of our country’s success stories. I wish to extend my thanks to the Board of Directors, Management, and Staff for your continued hard work and dedication in the pursuit of the institution’s mission to provide social protection to the people of these beautiful by nature, Turks & Caicos Islands. Premier Hon. Sharlene L. Cartwright-Robinson

October 22, 2020 Hon. Sharlene Cartwright-Robinson Premier & Minister of Finance Hon. Hilly A. Ewing Building 1292 Leeward Highway Providenciales Turks and Caicos Islands Dear Hon. Premier, In accordance with Section 48(1) of the National Insurance Ordinance, I have the privilege of submitting to you, on behalf of the Board of Directors, the Annual Report of the National Insurance Board for fiscal year 2019/20. Included with this report are the audited financial statements of the National Insurance Board, together with the report of the Independent Auditors. Samuel R. Swann Chairman

ANNUAL REPORT 2019 - 2020 Management Team RHESA CARTWRIGHT LEROY TULL MARIE SMITH RICHARD TAYLOR Acting CEO Legal Counsel Financial Controller Internal Auditor DIANDRA MILLS KEITH JENNINGS DOREAN WILLIAMS Investment Manager IS Manager Marketing Manager SUSAN MALCOLM CHERRIE INGHAM MICHAEL DEAN CHRISTA QUELCH HR MANAGER Research & Business Providenciales Grand Turk 8 Analyst Branch Manager Branch Manager

ANNUAL REPORT 2019 - 2020 Supervisory Team ROWENA ROBERTS DEXTER PARKER KAREN GARDINER (PLS) WESTON BOVELL Claims Adjudicator Senior Compliance Officer Data Entry Supervisor Database Programmer MAXINE BAPTISTE ALMONDO INGHAM VANESSA KENNEDY DENISE BOVIE Corporate Secretarial Systems Network Human Resource & Data Entry Supervisor Administrator Administration Officer Assistant ZALMUNNA DICKENSON ACCOUNTANT JOHN EWING ORALEY WILLIAMS Internal Audit Officer Vacant Legal Assistant Administrative Assistant SUB-OFFICE REPRESENTATIVES BEATRICE SKIPPINGS CAROLINA COX North Caicos Office South Caicos Office 9

ANNUAL REPORT 2019 - 2020 Operations Report PERFORMANCE OVERVIEW PERFORMANCE AUDITED 2020 AUDITED 2019 % CHANGE INDICATOR 7% Total Contribution Income 40,497,752 37,877,000 -55% 7% Investment Income 7,625,461 16,862,132 72% 1% Benefits Expenditure 19,609,435 18,292,674 Admin Expenditure 5,687,392 3,308,290 Year-end Reserves 320,808,386 320,019,082 Admin Exp as % of Total Contribution Income 14% 8.7% The Turks & Caicos Islands has enjoyed a vibrant economy for many years, and the National Insurance Board (NIB) saw increases in contribution income for successive years as a result. This year was no exception registering a 7% increase in contribution income over FY2019. The onset of the COVID-19 pandemic however, poses a threat to tourism, the mainstay of the TCI. Consequently, the original 5.4% growth in GDP forecasted for 2020 has been revised to -26.8%. The NIB likewise has revised projections for 2020/21 and will continue to closely monitor its contribution income and funded status, keeping a keen eye on cost containment. GENERAL & ADMINISTRATIVE EXPENSES The NIB’s general & administrative expenses for the year 2020 vs 2019 ending March 31, 2020 were $5,687,392 compared to 5,687,392 $3,308,290 for the year ending March 31, 2019. This represents a $2,379,102 or 72% increase from the previous 3,308,290 financial year ended March 2019. As a percentage of Total GENERAL & ADMINISTRATIVE EXPENSES Income, the general and administrative expenses for 2020 2020 2019 and 2019 were 11% and 7% respectively. The main reason for the $2,379,102 variance is the impairment loss on Contributions receivable changing from prior year by $1,712,441 or 227% as well as the impairment loss on Surcharges Receivable changing from prior year by $405,017 or 101%. The NIB’s strategic benchmark for administrative expense over contribution income plus benefit is 13%. Administrative expense has been consistently below this percentage for the financial years ending March 2020 and March 2019 as the NIB continues to successfully implement measures that have resulted in a decline in administrative expenses and at the same time improving operational efficiency. 10

ANNUAL REPORT 2019 - 2020 The NIB made strides in several areas of our operations during the 2019/20 fiscal year. The institution adopted its new Governance Manual thereby strengthening its oversight and the governance structure of the organization. A risk management framework was also established for the institution and is being monitored quarterly by the Board of Directors. The NIB will revisit its risk management framework to ensure mitigating actions for new risks presented by the recent pandemic are clearly documented. The NIB commenced efforts to increase the number of benefits paid by direct deposits. Efforts will continue into the new fiscal year to extend the use of this methodology of paying benefits as it is more efficient and cost effective. The NIB will be moving towards phasing out benefit payments by cheques in coming years. Alternative means of payment are being explored for person without bank accounts. The NIB expects to roll out its new web portal in 2020/21. The portal will allow contributors to submit their monthly contribution statements electronically. Customers would also be able to pay contributions online via their First Caribbean International Bank, RBC and Scotiabank’s BillPay product. The NIB also successfully converted its server network from physical servers to a virtualized environment. The benefit of this initiative is the additional level of redundancy it provides by allowing there to be a mirror setup of the network on the islands of Grand Turk and Providenciales. The new arrangement allows for upgrades in other areas previously restricted by the old Windows Server 2008 version. The NIB is working towards the publication of the Invitation to Tender (ITT) for a new computer system. The new system is expected to modernize the way the institution conducts business. The NIB will proceed with this critical capital investment despite the projected reduction in contribution income to mitigate the risks posed by the limitations of the current IT system. The Fund’s latest Actuarial Review was conducted as at March 31st, 2019. The objective of such an exercise is to determine whether the National Insurance Fund is financially sound and to assess the adequacy of the current contribution rate for the Plan’s projected expenditures. Based on the current NIB design structure and parameters, the NIB is projected to have sufficient reserves to support the current projected expenditures for another 29 years. Nevertheless, to limit the depletion of future reserves and to ensure the continued financial sustainability of the NIB, parametric reform is recommended within the next 2 to 5 years. The reform may entail contribution rate and/or pension design reform. In the face of a growing funded deficit, a contribution rate increase is not only imminent, it is the responsible action to take to safeguard the longevity of the fund, and the people it protects. The Turks and Caicos Islands, is experiencing what is typical in maturing social security programs. The longer the plan is in existence, the greater the number of eligible beneficiaries and the higher the pension rates payable to those pensioners. Additionally, the TCI, like the rest of the world, is also beginning to see increases in early pensions due to increased incidences of Non communicable diseases (NCDs). 11

ANNUAL REPORT 2019 - 2020 While the NIB has done well with containing administrative cost, the benefit cost of public pension plans, by their very nature, increases over time. The long-term benefit branch i.e. the pension arm of the fund, presently accounts for 84% of National Insurance total cost; this cost is projected to rise to 93% over the 60-year projected period. The reserves of the NIB as at March 31, 2019 stood at $282M. The plan was 44% funded with an unfunded actuarial liability exceeding $354M up from $268M in 2016. A 44% funded status means the NIB has 44 cents towards each $1 of accrued pension liability. The NIB has been in existence for over 28 years and the actuarial review is proposing a contribution rate increase for the first time. Over the almost three decades, the NIB has awarded significant increases in pensions and other benefits. In order to ensure the continued financial sustainability of the National Insurance Fund, and to seek to balance the intergenerational financial burden of providing an adequate range and level of benefits, across generations at an equitable rate; a combination of contribution and benefit reform was recommended in the 9th Actuarial Report. Contribution income is projected to cover expenses until 2027, which is less than a decade away. During the years 2028 to 2036, provided no reform measures are adopted by the plan, investment income will have to supplement contribution income to meet the fund expenses; and the accumulation of reserves will be at a slower pace. A cash flow deficit is projected by 2037, and the fund fully depleted by 2049. In order to protect the pension of the insured person entering the world of work today, parametric reforms will be required along the way. Good governance dictates that the decision makers for social protection plans make timely decisions to ensure the continued financial sustainability of the system; and the continued protection of a meaningful level of Reserves to protect the system for the long-term. It is noteworthy that a significant increase is projected for the NIB’s Dependency Ratio. In 2019, 100 active contributors supported 9 pensioners; and during the last 10 years of the projection period, this key demographic ratio is projected to stabilize at 100 active contributors having to support an average of 64 pensioners. Consequently, there will be a greater financial burden on the working age population to ensure that sufficient funds will be available to pay out the ever-increasing amount and number of retirement age pension benefits. The Actuary strongly recommended in the 9th Actuarial Review that parameters be changed and consideration of these changes be given top priority by the decision makers to take effect no later than April 1, 2021. The primary recommendation is to increase the contribution rate; and/or decrease the pension benefit accrual rate. If a reduction in the benefit accrual rate is adopted, it is recommended that persons within 10 years of the normal retirement age be grandfathered i.e. those within that period will receive a pension based on the current benefit formula; otherwise, the proposed new benefit formula will be applied. 12

ANNUAL REPORT 2019 - 2020 An early decision allows sufficient time for stakeholders to make the necessary adjustments and allow for the timely adoption of the contribution rate increase(s) and/or reduction in the retirement benefit accrual rate. Additional Changes Under Consideration are as follows: a. Increasing the minimum contributions weeks from 150 to 300 for an Invalidity Pension. b. Increase the pensionable age to 70 from 68 years for the Non-Contributory Old Age Pension. c. Increase pension rate for individuals opting to retire after age 65. The progression of the TCI National Insurance fund is consistent with what is expected from a system of this design. The long- term financial viability of the fund is our paramount priority, and we are committed to working towards that outcome. It is therefore imperative that the necessary amendments are adopted as prescribed within the recommended timeframe. This will ensure that the fund continues to remain viable into perpetuity for future generations. It is worthwhile to note that without reform the burden is placed on the investment program to support the sustainability of the system and that given the markets are in the late phase of the economic cycle, progressing quickly into a recession, the longevity of the fund will depend to a greater degree on pension reform measures. The NIB understands its accountability to the various stakeholders including TCI Government, our contributors and beneficiaries; and we will endeavor to ensure that the interest of all concerned are taken into consideration in any recommended changes for the betterment of the fund and the people of the Turks & Caicos Islands. The NIB sought to make rapid adjustments to its business procedures to adapt to the challenges presented by COVID-19. All managers and other key staff were required to work remotely, while a fraction of the staff was required to report to work on select days to ensure the institution could continue to offer its vital services. These are unprecedented times for the Turks and Caicos Islands and the world at large, but the NIB remains committed to serving you. I wish to register my profound thanks to the Board of Directors and hardworking staff of the NIB. This has been a challenging but rewarding year for us. Our resilience in yesteryears gives us the courage needed to face the years ahead. I have no doubt that we can and will persevere as long on we work together towards the vision, mission and strategic goals of this noble institution, embracing our fiduciary responsibilities. 13

ANNUAL REPORT 2019 - 2020 NEW REGISTRATIONS NEW EMPLOYERS BY ISLAND The NIB recorded 577 employer and 2,050 Insured Person registrations for 2019/20. ISLANDS COUNT There was an increase of 125 or 27.6% new employer Grand Turk 90 registrations compared to the previous year’s figure of 452. Salt Cay 1 The NIB recorded a total of 2,050 new insured persons for the year, an increase of 303 over the 1,747 registered in South Caicos 7 2018/19. North Caicos 8 Providenciales 471 Grand Total 577 NEW INSURED PERSONS BY ISLAND Providenciales continues to lead in the number of new registrations, with Grand Turk trailing in second place. ISLANDS COUNT The number of active insured persons continues to steadily Grand Turk 297 increase. The total increased from 21,765 in FY2018, to 22,192 in FY2019 and a further 317 accounts in FY 2020 Salt Cay 2 for a total of 22,509. South Caicos 47 REGISTER Middle Caicos 1 North Caicos 25 Providenciales 1,663 Parrot Cay 12 Pine Cay 2 Ambergris Cay 1 Grand Total 2,050 ACTIVE INSURED PERSONS FOR PERIOD FY 2018 TO FY 2020 22,600 22,400 22,509 22,200 22,192 22,000 21,800 21,765 21,600 21,400 Submit applications with supporting documents to 21,200 FY2019 FY2018 [email protected] FY2020 14

ANNUAL REPORT 2019 - 2020 COMPARING EMPLOYER AND SELF EMPLOYED CONTRIBUTORS OVER PAST THREE YEARS 3145 3223 3238 1006 1116 1151 EMPLOYER SELF EMPLOYED EMPLOYER SELF EMPLOYED EMPLOYER SELF EMPLOYED 2020 2019 2018 NEW EMPLOYER REGISTRATION BY INDUSTRY COUNT INDUSTRY 273 Activities of households as employers; undifferentiated goods and services producing activities of 70 households for own use 61 Construction 51 50 Accommodation and Food Service Activities 24 Wholesale and retail trade; repair of motor vehicles and motorcycles 11 9 Other Service activities 9 Arts, entertainment, and recreation 6 Professional, Scientific and Technical Activities 5 Agriculture, Forestry and Fishing 3 2 Transportation and Storage 2 Administrative and support Service Activities 1 Electricity, Gas steam and air condition supply 577 Activities of extraterritorial organizations and bodies Manufacturing Education Information and Communication TOTAL 15

ANNUAL REPORT 2019 - 2020 CONTRIBUTION CONTRIBUTION INCOME BY SECTOR For the year ending March 31, 2020 the NIB collected a total of $40,497,752 in contributions compared 9% 5% to March 31, 2019 when the total collected was 3% $37,877,000. This represents a 7% increase over the amount collected in the previous financial year ended March 2019. PRIVATE SECTOR CONTR. 83% SELF-EMPLOYED CONTR. GOV’T NON-PUB CONTR. GTK GOV’T PUB OFFICERS CONTR. Sector 2020 2019 2018 2017 2016 Private Sector 33,907,720 31,646,962 29,314,901 26,433,013 24,791,260 Govt Public Officers 1,932,727 1,871,872 1,867,288 1,697,166 1,492,903 Govt Non-Public Officers 3,410,613 3,288,908 3,069,706 2,832,184 2,460,218 Self Employed 1,246,401 1,068,951 800,304 738,516 792,533 Voluntary 291 307 116 - 277 Total 40,497,752 37,877,000 35,052,315 31,700,879 29,537,191 YoY % Change 7% 8% 11% 7% 12% Between Financial years ending March 2016 and March 2020 there has been a steady growth in the amount of contribution income collected and this is reflective of the increased economic growth and activity within the TCI economy during this period. Private Sector Income continues to be the largest contributing sector and accounted for 84% of the income collected at the end of March 31, 2020. Total Contribution income over a five financial year ends showed an average increase in total income collected of 9% The NIB strategic benchmark for administrative expense over contribution income plus benefit is 13%. Administrative expense has been consistently below this percentage for the financial years ending March 2020 and March 2019 as the NIB continues to successfully implement measures that have resulted in a decline in administrative expenses and at the same time improving operational efficiency. 16

ANNUAL REPORT 2019 - 2020 COMPLIANCE Period Active Employers Total Employers Compliance Rate The NIB has been able to maintain Apr-19 (made at least (expected to 87% its overall contribution compliance one payment pay) target of 76% during the fiscal year, during the last 2019/2020, narrowly escaping the year) 2986 COVID-19 pandemic towards the end 2614 of March 2020. May-19 2580 3004 85% The compliance department adopted 84% a new strategy to combat arrears Jun-19 2545 3009 during the year. This strategy is aligned with the recently amended Jul-19 2482 3011 82% Aug-19 2413 3024 79% compliance manual, which removes Sep-19 2482 3011 79% the unrealistic requirement of Oct-19 2289 3015 75% prosecuting all delinquent accounts 71% over 90-days. The NIB does not have Nov-19 2160 3025 the capacity inhouse to prosecute all accounts over 90-days. Dec-19 2023 3048 66% Jan-20 2955 3815 77% Feb-20 3075 4050 76% Management will always have as a Mar-20 3075 4050 76% goal the collection of all outstanding contributions due to NIB, both to fulfill its fiduciary obligation to protect the fund and to seek to ensure the insured person’s safety net remains intact through consistent contribution payments. National Insurance aims to accomplish this through a collaborative approach. We will continue to promote through our public relations efforts, the legal and moral obligation of contributors, especially employers who deduct contributions from employees and fail or delay the payment of those funds to NIB. Employees are also reminded periodically to check their wage history status. On the enforcement side, the current focus is managing the top 50 delinquent accounts each month. While these accounts represent less than 5% of the delinquent accounts numerically, the dollar value is an estimated 40% of the arrears. Arrears are now better categorized, and more focus is given to Unpaid Certificates, as a swifter means by which cases are brought before the magistrate’s court. The NIB collected $1.869M in contributions during the year due to compliance efforts. https://www.tcinib.tc/ Access National Insurance Compliance Department Online Email: [email protected] COMPLIANCEACCESS NATIONAL INSURANCE COMPLIANCE DEPARTMENT ONLINE Email: [email protected] 17

ANNUAL REPORT 2019 - 2020 BENEFITS BENEFITS BY BRANCH BENEFIT TYPES # of Claims in # OF SHORT TERM CLAIMS PAID FY2020 Period 20,000,000.00 Sickness 15,000,000.00 Maternity Allowance 926 10,000,000.00 Maternity Grant 383 5,000,000.00 367 SHORT TERM LONG TERM EMPLOYMENT # OF SHORT TERM CLAIMS PAID 1440 INJURY PAYMENT 38 Retirement Pension 189 SHORT TERM $2,758,194 Retirement Grant 262 LONG TERM $16,402,965 Non Contributory Old Age Pension 4 EMPLOYMENT INJURY $ 448,276 Survivors Pension 126 $19,609,435 Suvivors Grant 93 TOTAL Invalidity Pension Funeral Grant The NIB continues to provide benefits to its insured population and their survivors. # OF SHORT TERM CLAIMS PAID Constant Attendance All c. A total of 2,658 benefit applications were received for Injury Benefit 3 adjudication between April 1 2019 and March 31, 2020. The Disablement Pension 53 short- term branch that consists of sickness, maternity allowance Death Benefit 36 and maternity grant accounted for 74% of applications received Death Grant 7 followed by the Long-term branch; 24% and 2% the industrial / 1 employment branch. For the financial year 2019/2020, the NIB paid out a total of $19,609,435 in benefit payments. This accounted for a 7% increase over the previous year. While there as a minimal decrease in the short-term benefits (2%), the long-term branch increased by 10%. Retirement and Invalidity pensions increased by 10% and 26% respectively, while the Non-contributory decreased by 7%. The industrial branch registered an overall decreased of 13% when compared to $517K in 2019. Disablement benefit increased by 4% and Injury benefit increased by 18%. The decrease in the Death benefit is attributed dependent survivors of this benefit coming of age and portions of payments being discontinued. The NIB continues to be a guaranteed source of payment to insured persons who find https://www.tcinib.tc/ themselves unable to work or are of retirement age. We will continue to strive to ensure that the NIB remains a safety net for its contributors and their dependents. SUMBIT CLAIMSSUBMIT CLAIM FORMS WITH SUPPORTING DOCUMENTS ONLINE Submit claim forms with supporting documents to Email: [email protected] Email: [email protected] 18

ANNUAL REPORT 2019 - 2020 NATIONAL INSURANCE PROGRAMME AND PERFORMANCE INDICATORS *29(510(172)7+(785.6$1'&$,&26,6/$1'6 3URJUDPPHDQG3HUIRUPDQFH,QGLFDWRUVIRU$SULO0DUFK 1$7,21$/,1685$1&(%2$5' 67$78725<%2'<6800$5< 0,66,21 To achieve social insurance protection to aged, working population and their dependents by being financially viable and providing social Security in a reliable , caring and effective manner through competent , motivated staff and informed strong leadership. 675$7(*,&35,25,7,(6 MINISTRY EXPENDITURE - BY PROGRAMME Code Programme/Department 2017/18 Actual 2018/19 2018/19 Revised 2018/19 2019/20 Budget 2020/21 Forward 2021/22 Forward Approved Budget Forecast Estimates Estimates Estimates Budget Outturn Personal Emolument $ 2,599,541 $ 2,997,574 $ 2,997,574 $ 2,740,711 $ 3,227,818 $ 3,178,912 $ 3,237,443 Administrative Expenses $ 2,251,639 $ 2,867,915 $ 2,867,915 $ 2,618,978 $ 3,195,219 $ 3,153,479 $ 3,237,980 Beneficiary Expenses $ 16,369,824 $ 17,583,466 $ 17,583,466 $ 17,894,906 $ 20,245,887 $ 21,245,531 $ 21,619,985 Capital Expenditure $ - $ 2,086,735 $ 2,086,735 $ 800,000 $ 1,050,000 $ 531,500 $ 53,000 TOTAL AGENCY BUDGET CEILING $ 21,221,004 $ 25,535,690 $ 25,535,690 $ 24,054,595 $ 27,718,924 $ 28,109,422 $ 28,148,408 STATUTORY BODY STAFFING RESOURCES – Actual Number of Staff by Category Executive/Managerial 11 12 12 12 12 12 12 Technical/Front Line Services 36 36 36 36 36 36 36 Administrative Support 6777666 Wages Staff 1111111 TOTAL AGENCY STAFFING 54 56 56 56 55 55 55 PROGRAMME PERFORMANCE INFORMATION KEY PROGRAMME STRATEGIES FOR 2018/19 ACHIEVEMENTS/PROGRESSIN 2018/19 Improve Compliance Effort to achieve a compliance rate of 70% by March 2019. Target not yet achieved. The compliance efforts during the year has resulted in an increase in the compliance rate. 68% of the active contributors paid for the full year for period ending December 2018. Based on performance to date, the NIB expects to reach a 70% compliance rate by March 2019. The total number of compliance activities to date is 4,783, surpassing the target of 3,000 for the year. This represents an increase of 59% over the target for March 2019. 94% of the contributors paid at least 9 of the 12 months (70%) reviewed. Improve Benefit adjudications Process to ensure Short Term Benefits are processed and Target not met. While we have seen some improvement in the processing time for benefits during the year, paid within 5 days and long term benefits and paid within 30 days we did not achieve the target. The NIB however, remains committed to working towards this goal. The NIB proposes to commence printing benefit in Provo during the 2019/20 fiscal year and will be improving the vetting process at our customer service desks to reduce delays during the processing stage. The planned added manpower and additional safeguards proposed should aide us in achieving the target. Increase Public awareness to make sure stakeholders are knowledgeable about their Target achieved. The NIB was successful in the delivery of several Public Relations activities; Town Hall19 rights and obligations under the NIB Ordinance Meetings and Employer Visit & Presentations were delivered across the islands. As well, new brochures were published and a new Facebook page launched. Efforts are also afoot to update and re-launch the NIB website by March 2019.

Personal Emolument $ 2,599,541 $ 2,997,574 $ 2,997,574 $ 2,740,711 $ 3,227,818 $ 3,178,912 $ 3,237,443 Administrative Expenses $ 2,251,639 $ 2,867,915 $ 2,867,915 $ 2,618,978 $ 3,195,219 $ 3,153,479 $ 3,237,980 Beneficiary Expenses $ 16,369,824 $ 17,583,466 $ 17,583,466 $ 17,894,906 $ 20,245,887 $ 21,245,531 $ 21,619,985 Capital Expenditure $ - $ 2,086,735 $ 2,086,735 $ 800,000 $ 1,050,000 $ 531,500 $ 53,000 TOTAL AGENCY BUDGET CEILING $ 21,221,004 $ 25,535,690 $ 25,535,690 $ 24,054,595 $ 27,718,924 $ 28,109,422 $ 28,148,408 ANNUAL REPORT 2019 - 2020 STATUTORY BODY STAFFING RESOURCES – Actual Number of Staff by Category Executive/Managerial 11 12 12 12 12 12 12 Technical/Front Line Services 36 36 36 36 36 36 36 Administrative Support 6777666 Wages Staff 1111111 TOTAL AGENCY STAFFING 54 56 56 56 55 55 55 PROGRAMME PERFORMANCE INFORMATION KEY PROGRAMME STRATEGIES FOR 2018/19 ACHIEVEMENTS/PROGRESSIN 2018/19 Improve Compliance Effort to achieve a compliance rate of 70% by March 2019. Target not yet achieved. The compliance efforts during the year has resulted in an increase in the compliance rate. 68% of the active contributors paid for the full year for period ending December 2018. Based on performance to date, the NIB expects to reach a 70% compliance rate by March 2019. The total number of compliance activities to date is 4,783, surpassing the target of 3,000 for the year. This represents an increase of 59% over the target for March 2019. 94% of the contributors paid at least 9 of the 12 months (70%) reviewed. Improve Benefit adjudications Process to ensure Short Term Benefits are processed and Target not met. While we have seen some improvement in the processing time for benefits during the year, paid within 5 days and long term benefits and paid within 30 days we did not achieve the target. The NIB however, remains committed to working towards this goal. The NIB proposes to commence printing benefit in Provo during the 2019/20 fiscal year and will be improving the vetting process at our customer service desks to reduce delays during the processing stage. The planned added manpower and additional safeguards proposed should aide us in achieving the target. Increase Public awareness to make sure stakeholders are knowledgeable about their Target achieved. The NIB was successful in the delivery of several Public Relations activities; Town Hall rights and obligations under the NIB Ordinance Meetings and Employer Visit & Presentations were delivered across the islands. As well, new brochures were published and a new Facebook page launched. Efforts are also afoot to update and re-launch the NIB website by March 2019. Contain and optimize costs at below 13% of Benefit plus Contribution Income to Target achieved. Administrative Expense as a percentage of Benefits and Contributions has been maintained maximize the amount of funds available to invest by containing the cost of administering within the 13% target rate during the financial year. The actual rate as at December 2018 was 8.4%. While the fund. we anticipate this number increasing, we expect to remain within the targeted 13% to the end of the financial year. To attract and retain the best staff to fulfill the organization's vision and mission Work in progress. The NIB filled one (1) of three (3) key vacant positions to date and is actively engaged in recruiting persons for the other two vacancies. It is expected that the other 2 positions will be filled by March/April 2019. The NIB also continues to invest in the training of its staff by providing exposure to in- house and external training opportunities. Staff in professional and key positions are exposed to training with international social security organizations to ensure the organization stays abreast of social security best practices worldwide. As well, staff participate in training sessions hosted locally by various professional organizations. Increase use of Information Technology to improve the efficiency and effectiveness in The NIB selected two of its manual processes to automate this fiscal year; the production of clearance the delivery of social security services. certificates and the payment of contributions. The clearance certificate process has been automated, the system is now able to automatically generate the certificate. We are improving the process further before March 2019, by adding the capability in the system to affix an electronic signature. The process no longer requires a staff member to type hundreds of letters monthly.The NIB also increased the number of contributors submitting their contributions statements electronically. However, it is expected that the current number will increase drastically once the web portal now being developed is launched. Contributors will then be able to submit their contribution statements and payments online. Currently eight (8) members of staff are assigned to data entry and verification duties, we should be able to reduce this number by 1-2 persons during 2019/20. One of these persons will be assigned to the benefits process in Provo. If a second person can be reassigned, the individual will be utilized in another area within the same department. The Data Entry Department has been short staffed for sometime, but the NIB deferred increasing its compliment in light of the streamlining expected with new technological advances now coming on stream. KEY PROGRAMME STRATEGIES 2019/20 (Aimed at improving programme performance) Manage the volatility in the NIB portfolio by de-risking the investment portfolio through a series of rebalancing exercises, with at least one rebalancing in Quarters 1 and Q4. Improve the Benefit adjudication process by reducing the processing time to pay short-term benefits in 5 days of receiving the claims by March 2020. The NIB proposes to introduce the printing of cheques in Provo as one of our initiatives. New internal controls to guide the cheque printing process in Providenciales will be implemented by June 2019. Also, an additional person will be assigned to the benefit process by September 2019 from the Data Entry area. Continue to improve Compliance efforts to achieve a compliance rate for active contributors of 71% by June, 73% by September 2019 and 75% by March 2020. Continue to increase the use of information technology to improve the efficiency and effectiveness in the delivery of social security services by March 2020. The NIB plans to launch its web portal by June 2019, this should further reduce the institution's reliance on manual entry of contribution data. 20Increase stakeholder engagement by implementing a new citizen engagement plan to increase public awareness about the products, services and other information published by the NIB. The new plan will be launched in April 2019 and has a myriad of monthly actives scheduled during the fiscal year. 2017/18 Actual 2018/19 Planned 2018/19 Revised 2018/19 Outturn 2019/20 2020/21 2021/22 Estimate Estimate Estimate KEY PERFORMANCE INDICATORS Output Indicators (the quantity of output or services delivered by the programme)

the delivery of social security services. certificates and the payment of contributions. The clearance certificate process has been automated, the system is now able to automatically generate the certificate. We are improving the process further before March 2019, by adding the capability in the system to affix an electronic signature. The process no longer requires a staff member to type hundreds of letters monthly.The NIB also increased the number of contributors submitting their contributions statements electronically. However, it is expected that the current number will increase drastically once the web portal now being donelvineelo.pCeAduNrirseNlnaUtulyAnceLhigeRhdtE.(C8P)oOmnRteriTmbub2teo0rrss1ow9filsl-ttah2fefn0arb2ee0aasbsliegntoed submit their contribution statements and payments to data entry and verification duties, we should be able to reduce this number by 1-2 persons during 2019/20. One of these persons will be assigned to the benefits process in Provo. If a second person can be reassigned, the individual will be utilized in another area within the same department. The Data Entry Department has been short staffed for sometime, but the NIB deferred increasing its compliment in light of the streamlining expected with new technological advances now coming on stream. KEY PROGRAMME STRATEGIES 2019/20 (Aimed at improving programme performance) Manage the volatility in the NIB portfolio by de-risking the investment portfolio through a series of rebalancing exercises, with at least one rebalancing in Quarters 1 and Q4. Improve the Benefit adjudication process by reducing the processing time to pay short-term benefits in 5 days of receiving the claims by March 2020. The NIB proposes to introduce the printing of cheques in Provo as one of our initiatives. New internal controls to guide the cheque printing process in Providenciales will be implemented by June 2019. Also, an additional person will be assigned to the benefit process by September 2019 from the Data Entry area. Continue to improve Compliance efforts to achieve a compliance rate for active contributors of 71% by June, 73% by September 2019 and 75% by March 2020. Continue to increase the use of information technology to improve the efficiency and effectiveness in the delivery of social security services by March 2020. The NIB plans to launch its web portal by June 2019, this should further reduce the institution's reliance on manual entry of contribution data. Increase stakeholder engagement by implementing a new citizen engagement plan to increase public awareness about the products, services and other information published by the NIB. The new plan will be launched in April 2019 and has a myriad of monthly actives scheduled during the fiscal year. 2017/18 Actual 2018/19 Planned 2018/19 Revised 2018/19 Outturn 2019/20 2020/21 2021/22 Estimate Estimate Estimate KEY PERFORMANCE INDICATORS Output Indicators (the quantity of output or services delivered by the programme) % equity holdings reduced by March 2020 - - - - 7% 2% - % Short term Benefits paid in 5 days of receipt 70% 85% 50% 32% 60% 80% 85% # of Compliance activities (Surveys, visits, investigations, Court 2,949 3,000 3,000 3,500 3,700 4,000 4,300 cases) # of new manual processes automated by March 2020 0 2 2 2 2 1- # of PR Activities for the year 90 120 120 120 150 150 150 Outcome Indicators (the planned or achieved outcomes or impacts of the programme and/or effectiveness in achieving programme objectives) Equity holdings of 58% or less 55% 70% 50% 50% 58% % of Active Contributors paying contributions 66% 70% 65% 70% 75% 76% 77% Survey % of customers satisfied with NIB PR programs: Social 79% 85% 85% 85% 90% 95% 95% Media, Radio, Media, Website info ϭϯ͘ϭ 21

ANNUAL REPORT 2019 - 2020 SPONSORSHIP LETTER COMPLIANCE A copy of the Sponsorship Letter was circulated to the Board of Directors and Management of the NIB upon acceptance of the Chairman. This document is one of the roadmaps utilized by the institution when making decisions. The institution complied with the reporting requirement to submit monthly reports to the Minister on financial management information, and quarterly reports to the Budget Director. During the year the NIB kept spending within the budget limits, no requests for new funding was required. Management reported quarterly to the TCI Government and Board of Directors on the key programme strategies defined for 2019/20. A risk register was maintained and quarterly reports submitted as required. The NIB has addressed the areas of the Statutory Board Review Report that are within its authority. The Board of Directors published a summary of decision from all meetings of the Board for the reporting period, making it compliant with the transparency requirements of the Sponsor Letter. The staff compliment was maintained within the approved levels and there were not alterations or reconfiguring of positions. Finally, decisions were made, to the best of our knowledge, in keeping with all relevant laws and policing governing the NIB. The Board of Directors and Management work together towards compliance with the Turks & Caicos Islands Government Sponsorship Letter for the National Insurance Board. 22

ANNUAL REPORT 2019 - 2020 INVESTMENTS STRATEGY As a social security fund, we consider prudent investment management of paramount importance in ensuring that we meet pension obligations decades into the future. The latest actuarial review underscored the need for a sound and strategically positioned investment program estimating approximately 8 years of excess contribution accumulation, 17 years until the exhaustion of investment income in paying benefits and 29 years before the reserves of the NIB (the Fund) are completely exhausted. These dynamics shape how we view risks and opportunities and compels us to consider an investment program that can affect long-term value. Based on the latest Actuarial Review, the fund has an actuarial target rate of return of 5% for 2020 to 2029 and 4.5% thereafter. The asset allocation decision is an important part of portfolio construction and achieving this return objective. The Fund maintains a diversified portfolio of equities, fixed income, alternative investments and cash constructed through an asset allocation optimizer based on the risk tolerance and return objectives of the fund. This process includes the consultant’s capital market assumptions regarding risk, expected asset class returns and estimates of the NIB’s future obligations. Currently, the position of the Fund allows a moderately aggressive approach to asset allocation, which will aid in the capital appreciation the Fund seeks at this stage in its existence. The chart below shows the long-term strategic targets and the actual asset allocation of the Fund at end March 2020. ACTUAL PORTFOLIO TARGET PORTFOLIO CASH EQUITIES CASH EQUITIES 10% 40% 5% 44% PRIVATE EQUITY PRIVATE EQUITY 10% 8% COMMODITIES 0% COMMODITIES 1% HEDGE FUNDS 15% HEDGE FUNDS 13% CONVERTIBLES CONVERTIBLES 8% 8% FIXED INCOME FIXED INCOME 20% 18% At end March 2020, the Fund was valued at $312M and was relatively close to its target allocations, with moderate variances. Prudent management of the Fund entails ensuring that the Fund is closely positioned to its strategic targets affording it the best chance of achieving its return objectives. Periodic rebalancing of the portfolio was done throughout the year in order to achieve this where the NIB reallocated $10.5M from excess contributions into equities and hedge funds during the year, building up the portfolio toward its targets. 23

ANNUAL REPORT 2019 - 2020 PERFORMANCE The 2019-2020 financial year was undoubtedly a challenging year for investors, particularly in the final quarter where the COVID-19 pandemic rattled financial markets. Though investors were challenged by slowing global growth for most of the year, central bank intervention through monetary policy easing along with trade negotiation progress between the US & China helped the portfolio to enjoy three consecutive quarters of gains. The final quarter of the year saw returns significantly impacted as COVID-19 virus containment measures forced businesses to close, essentially halting economic activity worldwide. Governments and central banks around the world rushed to provide support to businesses and households through massive stimulus packages and unprecedented policy responses. The graph below shows the portfolio growth over the year and the impact of COVID-19 on portfolio value. Equities and Commodities were particularly stricken in the MILLIONS ($) Portfolio Growth 2019-2020 final quarter, recording losses in excess of 20% each, while the Convertibles asset class captured only a portion of the 360 downside, declining nearly 9%. 350 340 In total, the final quarter erased all the gains of the year and by 330 year-end, the portfolio declined -3.62%. Asset classes such as 320 fixed income and private equity, though positive, were unable to 310 add value due to either their underweight position or inability of 300 active managers to outperform their benchmarks. 290 280 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Value 316 309 321 324 324 330 335 341 349 349 340 315 The portfolio is benchmarked against a ‘model portfolio’ which illustrates a fully invested, passively managed portfolio allocated according to the strategic asset allocation outlined in the Investment Policy Statement. This model portfolio was designed to meet the actuarial target rate of return. The portfolio also has an absolute return objective of US inflation plus 3% as well as the actuarial target return of 5%. The tables below show how the portfolio performed relative to its benchmarks for the year. Return Over (Under) Weighted Contribution Performance NIB Portfolio -3.62% Asset Class NIF Policy Index Variance Policy Index -1.93% - Equities -0.15% Absolute Return (US CPI +3%) 4.50% Fixed Income -5.58% -5.44% -0.23% Actuarial Target RoR 5.00% -169bps Hedge Funds 0.33% Cash 1.38% 1.61% -0.04% -812bps 0.61% 0.28% -862bps 0.06% 0.10% While the portfolio was challenged this year, the strength Convertibles 0.02% -0.26% 0.27% of diversification insulated the portfolio from steep losses Private Equity 0.33% 1.77% -1.44% witnessed in the broader stock markets through low or Commodities -0.43% 0.00% -0.43% uncorrelated asset classes such as hedge funds, private -3.62% -1.93% -1.69% equity and fixed income in the portfolio. Through turbulent times, the NIB maintains a disciplined approach toward long-term investing through its strategic asset allocation in order to afford the fund the best possible opportunity of meeting its return objectives and being a reliable source of assets to pay promised benefits. 24

ANNUAL REPORT 2019 - 2020 Value Statements Turks & Caicos Islands National Insurance Board’s Value Statements to its key constituents are: We encourage Always Always strive for Avoid any staff demonstrate improvement solicitation of participation in high moral in the quality reward or praise various aspects standards of service from customers of management exhibiting provided to in connection and loyalty, honesty, our customers with any duties demonstrate integrity and and to pursue performed in leadership by diligence in the continuous relation to our example. performance of individual job fucntions. Create an our duties and development. Carry out all environment responsibilities. Avoid all conflict assignments in of trust and Always conduct of interests (real a reliable and respect among ourselves in a or perceived). timely manner staff and professional with a duty of management by manner both care treating others inside and as we expect outside the others to treat organisation. us. 25

ANNUAL REPORT 2019 - 2020 WORKFORCE The NIB maintained a staff count of 50 to 51 employees throughout the period April 2019 to March 2020. The workforce included 11 Managers, 11 Senior Officers, 15 Officers, 8 Clerk and 4 Support Staff, working on a permanent basis with the exception of two part-time Support Staff located in our North and South Caicos Sub-Offices. NEW EMPLOYEES DEPARTING EMPLOYEES EMPLOYEE POSITION DEPARTMENT EMPLOYEE POSITION DEPARTMENT NAME HR Manager NAME HR & Accountant Accounts & Susan Malcolm Administration Rowena Nelson Finance Assistant Weston Bovell Systems Network Management Katrina King- Accountant Accounts & Administrator Information Smith Compliance Finance System Arthur Ashton Officer Operations Provo TRAINING AND DEVELOPMENT / STAFF ACCOMPLISHMENTS During this period, the NIB provided a range of training and development opportunities aimed at building employee service delivery capacity, meeting strategic needs and ensuring a large percentage of employees are well-trained and qualified. Some training highlights: -Rhesa Cartwright, Acting Director attended Human Resource & Compensation Committee Conference July 2019, St. Lucia. -HR Manager, HR Officer, Branch Managers, Legal Counsel, Acting Director, Financial Controller attended Decision Making and Discipline in the Public Sector and Statutory Bodies – What Managers Need to Know by hosted by TCIG November Grand Turk and December 2019 Providenciales -All staff participated in Fire Safety June 2019. -Grand Turk Staff Communication / International Skills, February 2020. -All staff participated in a workshop ‘Ethical dilemmas in the workplace’ facilitated by Fenelon Employment Services. October 2019. 26

ANNUAL REPORT 2019 - 2020 FIRE SAFETY TRAINING - GRAND TURK A few of the Grand Turk staff participants. Astrid Williams and Andrenique Ewing (Fire Safety Training Course) assisting in a demonstration to reinforce that you need heat, oxygen and fuel together in equal portions to start a fire. Participants in Provo Tushae Wilson showing how to put out a fire (Fire Safety Training) using the fire extinguisher. 27

ANNUAL REPORT 2019 - 2020 Long Service Awards 20 The presentations were made at the General Staff Meeting Years held in January 2020. Mrs. Marie Smith, Financial Controller 20 presenting award to Mr. Almondo Ingham - Years Systems Network Administrator 25 Mrs. Christa Quelch, Branch Manager presenting award to Mrs. Zalmunna Years Dickenson - Audit Officer Ms. Rhesa Cartwright, Acting Director, presenting award to Mrs. Karen Gardiner, Data Entry Supervisor 28

ANNUAL REPORT 2019 - 2020 Other Activites MANAGEMENT LUNCH AND LEARN SESSION The Lunch and Learn series was an idea proposed byMs. Diandra Mills, Investment Manager. It is a training and development initiative for Supervisors and Managers to understand the roles and purpose of each other’s departments, their interdependencies and presents an opportunity to build comradery. The first session was conducted by Ms. Mills in June 2019. 29

ANNUAL REPORT 2019 - 2020 Annual Staff Party The NIB annual staff party brings all staff together for fellowship, fun and games; all aim at improving staff relations and comradery. All staff meet in January 2020 in Grand Turk for a Dinner Party at Turks Head Inn, Front Street. StHafifgPhlairgthyts SAURICIO MILLS REITA BASDEN Best Dressed Male One of the door prize recipient VANESSA KENNEDY GRETCHEN BEEN, HR Officer presenting ANDRENIQUE Customer Care Officer and Event with a prize for being the best Coordinator presenting game prize dressed female to ZALMUNNA TUSHAE Door prize recipient 30

ANNUAL REPORT 2019 - 2020 Annual General Staff Meeting The Annual General Staff meeting was hosted at the Life Center Building on Grand Turk. The day started with devotions led by Pastor Hon. Temard Butterfield. The Hon. Premier Sharlene Cartwright-Robinson, joined the staff for devotions and also greeted the group prior to her departure. Ms. Eunice Blythe Clare conducted a training session on “Professionalism in the Workplace.” Managers, including the Acting CEO, made presentations during the day. Staff were informed achievements in the preceding year and future plans. They were also challenged to stay focused and bring their A-game for the rest of the year. 31

ANNUAL REPORT 2019 - 2020 WORLD AUTISM AWARENESS DAY Staff in Grand Turk wearing blue in honour of World Autism Awareness Day- April 2, 2019 joining the rest of the world in this recognition campaign. GRAND TURK SOCIAL CLUB CHRISTMAS CELEBRATION Island tour on Hummers Dinner at Sand Bar Social club donation to the wellness. The NIB Grand Turk Social Club apart from celebrating each other through social gathering also Community Helpers seeking to assist the less fortunate. 32

ANNUAL REPORT 2019 - 2020 CAPITAL PROJECTS 2019 / 2020 Water Damaged Ceiling Roof work- replacing roof sheets at Conference Room and applying peel and seal The NIB took occupancy at its current office location in September 2014. The Hon. Headley Durham Building, Church Folly became the new Head Office, a centralized location for servicing customers. After the passing of Hurricane Irma, the building was overhauled to repair the damages sustained on the building west side which resulted in considerable water damages to the interior. Fortunately, the primary structure was not compromised and the building structural integrity was retained. The renovation of the Hon. Headley Durham building was carried out by Olympic Construction. Hon. Hilly A. Ewing Building Extended Parking Lot New Generator New Server Network 33

ANNUAL REPORT 2019 - 2020 Charting the Way Forward: An IT Perspective Prepared by: Keith Jennings, Information Systems Manager The mission of the Turks and Caicos Islands National Insurance Board (NIB) is; “To Be Fiscally Prudent in the Provision of Dependable, Transparent and Excellent Social Security Services to our Beneficiaries.” This Mission of the TCINIB can only be accomplished by the use of technology that will advance the services that we offer to our customers. At the NIB we thrive on the overall growth and development of the organization and the levering of technology to achieve our goals. The TCINIB Management Information Systems (MIS) Department plays a pivotal role in ensuring that the mission is accomplished.The MIS Department is the technology engine of this organization.The department provides user support and technology solutions that aids the organization in carrying out its mission. The MIS Department vets new technology solutions to ensure that they are cost effective, reliable and improves the efficiency within the organization. The Department has been engaged in several major projects during the past year, one of which was the virtualization of the NIB physical server network. Virtualization is using software to replicate the functionality of a physical device. The project involves setting up of two Virtual server sites one in Grand Turk and the other at the Providenciales office where the physical servers were replaced with virtualized servers. This project has been very beneficial to the TCINIB in reducing the risk of servers lost due to transport. In 2017, after the passing of the two hurricanes Irma and Maria the island of Grand Turk was without power for three months and in order to continue business operations and payment benefits, the physical servers were disassembled and flown to the Island of Providenciales to be setup at the Branch office located there. With virtualization there is no need to physically relocate servers in the event of a disaster because the servers are not physical devices. These severs are software applications that can be relocated to other sites within the TCINIB network by the click of a button. 34

ANNUAL REPORT 2019 - 2020 There are several other benefits that the NIB derived from the setup of the virtual server network, these include: 1. Less IT resources are needed to carryout system configuration changes. 2. Improved performance of application running on the new virtual servers 3. Server room space that have been a hot issue over the years has become a non-issue due to the low space requirements for virtual servers. 4. The virtual environment is scalable and allows for future growth of the NIB. The MIS Department is also engaged in the implementation and setup of a portal that will allow for employers and self-employed persons to submit their monthly contributions online. The goal of this project is to allow our contributors to view their Monthly Contribution statements, (MCS) history and payments made to the NIB. Contributors will be able to add and remove employees and submit contributions. Once the MCS is completed and submitted via the portal a statement will be produced showing the amount to be paid inclusive of late fees if the payment is late. The statement will also provide steps/instructions to the customer on how to pay the outstanding balance by bank transfer via the three banks listed on the document. This portal is currently being tested with a small group of employers however, once the portal is fully implemented it will eliminate the need for Data-entry staff to manually post contributions. The employer/ self-employed contributions will automatically be entered in the application sheet via the portal and the data entry staff would have more time to focus on other pressing issues related to the organization. The MIS Department is always looking for ways to improve functionality and service delivery to its customers and as such, the department is currently working with a consultant to develop an ITT for the replacement of the NIB current benefits management application Bema. Bema lacks the functionality and adaptability that is required in an enterprise application, and the MIS Department is seeking out potential vendors that have solutions that will meet the present and future needs of the NIB. The MIS Department understands that levering technology is the only way to achieve the mission of the TCINIB and for this reason we will continue to provide IT solutions that aid the organization in providing Dependable, Transparent and Excellent Social Services to our Beneficiaries. 35

ANNUAL REPORT 2019 - 2020 ISSA WORLD SOCIAL SECURITY FORUM 2019 The World Social Security Forum was held in Brussels, Belgium from October 14-18 under the theme “Protecting People in a Changing World.” The forum welcomed close to one thousand three hundred participants from one hundred and forty counties. Delegates were Ministers, CEOs and other senior managers from social security institutions around the world. The Caribbean Region was well represented. The adjacent photo was taken at the conclusion of a meeting with the Secretary General of ISSA and the Caribbean delegation convened to discuss training plans for the region for the 2019 - 2022 triennium. The Turks & Caicos Islands was represented by Hon. Sharlene Cartwright-Robinson, Premier and Minister with responsibility for National Insurance, Mr. Samuel Swann, Chairman and Miss Rhesa Cartwright, Acting CEO. 36

ANNUAL REPORT 2019 - 2020 37

ANNUAL REPORT 2019 - 2020 PENSION REFORM IN THE CARIBBEAN – PORT-OF-SPAIN, TRINIDAD (DECEMBER 2019) The NIB was invited to participate in a The Acting CEO formed a part of the training on Pension Reform organized by TCI delegation to the (13th) Caribbean the ILO Decent Work Team and Office for Conference on National Health the Caribbean and the ILO International financing initiatives. The meeting was Training Centre. hosted by the Anguillan Social Security Board in November 2019. The program was hosted by the National Insurance Board of Trinidad and Tobago in Port of Spain, December 10-12, 2019. The training was designed for high-level and technical representatives from social security organizations and covered the following themes: • Good governance of pension schemes • Actuarial issues in pension reform • Pension reforms in the Caribbean and worldwide trends • Automatic stabilizers of pension systems 38

ANNUAL REPORT 2019 - 2020 2ND HEALTH EXPO The NIB participated in the 2nd Health Expo hosted by the Health Promotion Advocacy and Special Needs Units. The event took place on November 26th at the Gustavus Sporting Complex. The aim was to have organizations provide information on their services and programs available to the public, inclusive of persons with disabilities. The NIB was represented by Miss Rhesa Cartwright, Acting CEO and Miss Dorean Williams, Marketing and Public Relations Manager. 39

ANNUAL REPORT 2019 - 2020 Statement On Internal Control Scope of Responsibility As Accounting Officer, I have responsibility for maintaining a sound system of internal control that supports the achievement of the National Insurance Board policies, aims and objectives, whilst safeguarding the public funds and departmental assets for which I am personally responsible, in accordance with the responsibilities assigned to me in the Public Finance Management Ordinance. The Internal Controls of the National Insurance Board (NIB) are all the Policies and Procedures that the NIB have designed to give reasonable assurance regarding the achievement of organizational objectives in the following areas: • Reliability of Financial Reporting • Operational effectiveness and efficiency • Compliance with applicable laws and regulation The purpose of the system of internal control The system of internal control is designed to manage risk to a reasonable level rather than to eliminate all risk of failure to achieve policies, aims and objectives; it can therefore only provide reasonable and not absolute assurance of effectiveness. The system of internal control is based on an ongoing process designed to identify and prioritize the risks to the achievement of NIB policies, aims and objectives, to evaluate the likelihood of those risks being realized and the impact should they be realized, and to manage them efficiently, effectively and economically. The system of internal control has been in place in the NIB for the year ended 31, March 2020 and up to the date of approval of the annual report and accounts. The NIB has developed a system of internal control that not only includes policies and procedures but also includes control activities which fall into two categories namely that of prevention and detection. These activities are applied throughout the organization at all levels to the various functions and processes and include the following: • Authorization • Documentation • Reconciliation • Security • Separation of duties 40

ANNUAL REPORT 2019 - 2020 Capacity to Handle This document Risk and the Risk Control Framework The NIB has developed a risk profile and risk management policy approved by the Board of Directors which identifies, prioritize and evaluate 15 key risks in the organization and the likelihood and impact should these risks be realized. In order to strengthen the risk control framework and to ensure that this reflects the top 15 key risks identified within the organization the NIB embarked on a risk- based analysis of its current Strategic Plan. A risk register was developed from this information and this document is reviewed quarterly by management and submitted to the Board of directors. A copy of the Board approved document is also sent each quarter to the Ministry of Finance. The risk register has since April 2020 been updated to include the risks associated with COVID-19 pandemic. Review of Effectiveness As Accounting Officer, I have responsibility for reviewing the effectiveness of the system of internal control. My review is informed by the work of the internal auditor and the executive managers within the National Insurance Board, who have responsibility for the development and maintenance of the internal control framework, and comments made by the external auditors in their management letter and other reports. The effectiveness of the internal control system has been reviewed via our current governance processes and these include: • Monthly management reports to the Board of Directors • Quarterly Risk register Report • Monthly Internal Auditors reports to the Board of Directors • Audit committee Reports to the Board • Annual External Audit and Management Letter I am therefore satisfied based upon the reviews conducted that the control environment of the NIB has been effective for the year ended March 2020. Where areas of weaknesses have been identified management has made the necessary adjustments and changes to strengthen the internal controls thus improving overall effectiveness of the system of controls. Samuel Swann Chairman 41

ANNUAL REPORT 2019 - 2020 2020 FINANCIAL STATEMENT TURKS AND CAICOS ISLANDS NATIONAL INSURANCE BOARD YEAR ENDED MARCH 31, 2020 42

ANNUAL REPORT 2019 - 2020 FINANCIAL STATEMENTS CONTENTS 2020 TURKS AND CAICOS ISLANDS NATIONAL INSURANCE BOARD Financial Statement | Year Ended - March 31, 2020 Independent Auditor’s Report 44-47 Statement of Financial Position 48 Statement of Income, Expenses and Reserves 49 Long-Term Benefit Branch 50 Short-Term Benefit Branch 51 Employment Injury Benefit / Disablement and Death 52 Statement of Changes in Reserves 53 Statement of Cash Flows 54 Notes to Financial Statement 55-107 43

FINANCIAL KPMG Ltd. STATEMENTS KPMG Building 18 The Village at Grace Bay 2020 PO Box 357 Providenciales Turks and Caicos Islands, BWI Telephone: 649 946 4613, Fax: 649 946 4619 INDEPENDENT AUDITORS’ REPORT To the Directors of the Turks and Caicos Islands National Insurance Board: Report on the Audit of the Financial Statements Qualified Opinion We have audited the financial statements of the Turks and Caicos Islands National Insurance Board (NIB), which comprise the statement of financial position as at March 31, 2020, the statements of income, expenses and reserves, changes in reserves and cash flows for the year then ended, and notes, comprising significant accounting policies and other explanatory information. In our opinion, except for the effects of the matter described in the Basis for Qualified Opinion section of our report, the accompanying financial statements give a true and fair view of the financial position of NIB as at March 31, 2020, and of its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRS). Basis for Qualified Opinion As disclosed at notes 10 and 12 to these financial statements on April 9, 2010, TCI Bank Limited (TCI Bank) was placed into provisional liquidation and on October 29, 2010, TCI Bank was placed into liquidation. At March 31, 2020 and 2019, NIB held substantial long- term deposits with TCI Bank, a current account with TCI Bank and an investment in TCI Bank. NIB’s management have made certain fair value adjustments in relation to NIB’s various asset holdings with TCI Bank. Such fair value adjustments are disclosed more fully in the aforementioned notes to these financial statements and they include, but are not restricted to, a 45% (2019: 45%) fair value adjustment against the carrying value of NIB’s long-term deposits and current account with TCI Bank. As at the reporting date NIB had received interim distributions of 55 cents (2019: 40 cents) on the dollar from the liquidator in respect of its long term deposits and current account. 44 KPMG Ltd., a Turks and Caicos Islands limited liability company incorporated under the Turks and Caicos Islands’ Companies Ordinance, is the Turks and Caicos Islands member firm of KPMG International, a Swiss cooperative.

Turks and Caicos Islands National Insurance Board Independent Auditors’ Report March 31, 2020 Basis for Qualified Opinion, continued FINANCIAL STATEMENTS The ultimate outcome of this matter cannot presently be determined with certainty and the actual fair value adjustment that will ultimately be needed against the carrying value 2020 of NIB’s various asset holdings with TCI Bank under IFRS 13, ‘Fair Value Measurement’ , and IFRS 9, ‘Financial Instruments’, can only be estimated using information available as at the date of this report and could vary significantly from the estimate provided because of the considerable inherent uncertainty involved. Consequently, the impact on the statement of financial position of the carrying value of these asset holdings with TCI Bank and the impact of the changes in fair value reported in the statements of income, expenses and reserves, as a consequence of TCI Bank being placed into provisional liquidation and subsequently into liquidation, cannot currently be estimated with any reasonable certainty and may be material. We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are independent of NIB in accordance with the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants (including International Independence Standards) (IESBA Code) and we have fulfilled our other ethical responsibilities in accordance with the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion. Emphasis of Matter Without further qualifying our opinion, we draw attention to note 23 to these financial statements. As disclosed at note 23 to these financial statements, NIB has elected to apply International Accounting Standard 26, ‘Accounting and Reporting by Retirement Benefit Plans’, which requires the actuarial present value of promised retirement benefits to be recognised on the statement of financial position, in the notes to these financial statements or in an accompanying actuarial report. NIB has chosen to disclose the actuarial present value of promised retirement benefits in the notes to these financial statements. NIB’s last two actuarial reviews were at March 31, 2019 and March 31, 2016. The actuarial present value of promised retirement benefits was US$636 million at March 31, 2019 (2016: US$459 million). NIB had total reserves of US$282 million at March 31, 2019 (2016: US$191 million). At March 31, 2019 there was therefore a shortfall of US$354 million (2016: US$268 million) between the total reserves and the actuarial present value of promised retirement benefits. As at the reporting date the Directors of NIB are considering ways in which this shortfall can be addressed. KPMG Ltd., a Turks and Caicos Islands limited liability company incorporated under the Turks and Caicos Islands’ Companies Ordinance, is the Turks and Caicos Islands member firm of KPMG International, a Swiss cooperative. 2 45

FINANCIAL Turks and Caicos Islands National Insurance Board STATEMENTS Independent Auditors’ Report March 31, 2020 2020 Responsibilities of Management and Those Charged with Governance for the Financial Statements Management is responsible for the preparation of financial statements that give a true and fair view in accordance with IFRS, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is responsible for assessing NIB’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate NIB or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing NIB’s financial reporting process. Auditors’ Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:  Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.  Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of NIB’s internal control. KPMG Ltd., a Turks and Caicos Islands limited liability company incorporated under the Turks and Caicos Islands’ Companies Ordinance, is the Turks and Caicos Islands member firm of KPMG International, a Swiss cooperative. 46 3

Turks and Caicos Islands National Insurance Board Independent Auditors’ Report March 31, 2020 Auditors’ Responsibilities for the Audit of the Financial Statements, continued FINANCIAL STATEMENTS  Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. 2020  Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on NIB’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause NIB to cease to continue as a going concern.  Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Report on Other Legal and Regulatory Requirements In accordance with the requirements of the Turks and Caicos Islands’ National Insurance Ordinance 1991 and National Insurance (Financial and Accounting) Regulations (hereafter referred to collectively as ‘the Ordinance’), we also confirm that the presentation, structure and content of the financial statements of NIB as at March 31, 2020 and for the year then ended are consistent with the requirements of the Ordinance. Intended Use of Report This report is intended solely for the information and use of the Minister of Finance of the Turks and Caicos Islands and the Directors of NIB and should not be relied on by anyone other than these specified parties. Chartered Accountants Providenciales, Turks and Caicos Islands October 22, 2020 KPMG Ltd., a Turks and Caicos Islands limited liability company incorporated under the Turks and Caicos Islands’ Companies Ordinance, is the Turks and Caicos Islands member firm of KPMG International, a Swiss cooperative. 4 47

TURKS AND CAICOS ISLANDS NATIONAL INSURANCE BOARD Statement of Financial Position At March 31, 2020 with comparative figures at March 31, 2019 2020 2019 Assets US$ 30,557,783 32,723,761 4,817,681 4,736,873 Current assets: 6,000,000 – Cash and cash equivalents (note 5) 202,426 150,000 Contributions and other receivables (note 6) – 2,602,874 Short-term investment (note 7) 61,908 63,066 Current portion of long-term receivables (note 9) Current portion of long-term deposits (note 10) 41,639,798 40,276,574 Other assets 270,693,384 271,385,469 Non-current assets: 5,000,000 5,205,917 Financial assets measured at fair value – – through other comprehensive income (FVOCI) (note 8) 3,475,204 3,151,122 Long-term receivables (note 9) – – Long-term deposits (note 10) Property and equipment (note 11) 279,168,588 279,742,508 Investment in TCI Bank Limited (note 12) US$ 320,808,386 320,019,082 Liabilities and Reserves US$ 467,455 840,138 Liabilities: 40,102,000 37,158,000 Accounts payable and 40,569,455 37,998,138 accrued expenses (note 13) FINANCIAL Provisions for long-term benefits, 192,964,742 197,548,371 STATEMENTS other than promised retirement benefits (note 23) 36,123,501 35,238,228 2020 Reserves: 316,751 573,738 Long-term benefit branch 50,833,937 48,660,607 Short-term benefit branch 280,238,931 282,020,944 Employment injury benefit branch Employment injury benefit (note 22) Disablement and death benefit US$ 320,808,386 320,019,082 The accompanying notes are an integral part of these financial statements. These financial statements were approved on behalf of the Board of Directors on October 22, 2020 by the following: Samuel Swann Chairman Rhesa Cartwright Director 48 5