The Tribune

By KHRISNA RUSSELL

Deputy Chief Reporter

FINANCE Minister K Peter Turnquest defended the Minnis administration’s decision to pay “a lot of money” for policy coverage under the Caribbean Catastrophic Risk Insurance Facility even though it did not meet the deductible, affecting the payout received for Hurricane Irma related damage.

The deputy prime minister suggested while the payout was disproportionate to the premium, the country would be in a better position if it ever faced widespread devastation as did Dominica or Barbuda as a result of a major storm.

He was responding to criticism from Cat Island, Rum Cay and San Salvador MP Philip “Brave” Davis in the House of Assembly yesterday who insisted that re-enrolling in the insurance was a waste of public resources. The risk insurance policy was dropped under the former Christie administration.

“Yes, Mr Speaker, we paid a lot of money for the policy coverage and yes we did not meet the deductible for a payout this time, but what about next time?” Mr Turnquest asked.

“What if we suffered a direct hit in Nassau as they did in Dominica or Barbuda or even Ragged Island.”

He also said: “I am not surprised by the misguided attempts of Cat Island, Rum Cay and San Salvador to score political points. (There is) distorted speculation and uninformed attempts to equate insurance premiums paid with claims recovered.

“By their logic, Mr Speaker, no one would ever buy home insurance because the insured property may never experience damage exceeding the deductible.

“For example if a pipe bursts and damages the carpet (and) the cost to repair was not significant enough to meet the deductible, they seem to be advocating to homeowners to cancel the entire coverage. So if a hurricane comes the homeowner assumes all the risk of repairs to the entire house. How reckless and irresponsible?

“This unwise risk taking is what has some of our citizens today sitting under leaking roofs waiting for government assistance because they cannot afford to fix their properties by themselves,” the East Grand Bahama MP added.

“Further following their argument, no one should buy medical insurance because in most cases you pay the premiums all year and the one time you had to go to the doctor the policy does not pay because you have not met the annual deductible. I ask in the same way they suggest that the CCRIF should be cancelled because it had no payout, should they cancel the medical insurance programme?”

Earlier during the House session, Mr Davis raised concerns regarding CCRIF.

He said: “This is a waste of public resources. It was the result of rank political posturing rather than adhering to the advice of senior policy experts and technical advisors in the public service.

“What a painfully humiliating and expensive lesson. Maybe the member for Killarney (Prime Minister Dr Hubert Minnis) will finally reconcile himself to the policy of self-insurance against damages from natural disasters such as hurricanes and tornadoes.”

He also said: “At the start of this administration, this side was severely criticised for our decision to demit from making payments to the Caribbean Catastrophe Risk Insurance Facility. We told the government that experts in the Ministry of Finance, Met Department and the Port Department advised that self-insurance would be more cost beneficial to government. This came after we were unable to make any successful claims in respect of Hurricane Joaquin.

“Up to that time, the Bahamas had been paying premiums in the tens of millions and was unable to collect anything.

“Following (Hurricane) Matthew, I am advised, CCRIF wrote the government suggesting that we may have qualified for loss compensation, this suggestion was referred to the team that had advised earlier and it was that team’s considered view that we would not have qualified. The persons who advised us are still in the Public Service.

“The honourable member for Killarney promised this House on several occasions to table the letter received from CCRIF confirming forfeiture of some $33m but to date has flatly refused to do so.”

According to a statement from CCRIF dated September 19, 2017 and tabled in the House of Assembly yesterday by Mr Turnquest, the Bahamas received its first payout of $397,598 following Hurricane Irma based on its tropical cyclone policy and excess rainfall policy.

Noting the policy is not designed to cover all losses, the statement said it is designed so governments have emergency relief capital when natural disasters strike.