CHESTER COOPER ON THE HURRICANE INSURANCE

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STATEMENT BY CHESTER COOPER,
PLP SHADOW MINISTER OF FINANCE, FINANCIAL SERVICES & INDUSTRY

Though the prime minister has promised to table information regarding the low payout by and apparently exorbitant premium paid to the Caribbean Catastrophic Risk Insurance Facility (CCRIF) with respect to this budget cycle and Hurricane Irma, there are some critical questions that bear asking.

First, of course, is the essential question: How much was paid for the latest annual premium?

I understand that the amount paid exceeds $2.6 million, which would be more than double what the Christie administration last paid before cancelling the policy – a move the Minnis administration has been highly critical of.

Second: Why was the policy continued despite the advice of experts that it not, without further examination of the risks vs. benefits?

Third: Why does the minister of finance now say he will seek to renegotiate the terms of the policy after having already paid for the contracted policy?

Fourthly: If it is a Group Policy how does the Minister anticipate being able to negotiate the terms more favorable to the Bahamas that its joint-insureds?

I am intimately familiar with the insurance industry, and it is a ridiculous notion that you will renegotiate a policy that has already taken effect with a potentially significant claim pending. Perhaps the minister intends to negotiate better terms on the next policy.

However, this begs a fifth question: Why did the Minnis administration not properly assess and negotiate the current policy before signing it?

On the face of it, it appears, in a time when the Free National Movement is preaching fiscal discipline and trimming government expenditure, the Minnis administration negotiated a deal that cost The Bahamas some $2.4 million it may never recoup.

We look forward to the government explaining the circumstances of the current CCRIF in full view of the public, given its commitment to transparency and accountability.

It appears that in the new Gov’t haste to find a smoking gun it made an egregious and expensive error to which they must be held to account.

The PLP supports identifying suitable mitigating strategies to natural disasters given that we live in a hurricane zone. We anticipate that the Gov’t will be able to design over time an appropriate facility drawing on the expertise resident in the private insurance sector.