The Tribune

By YOURI KEMP

The Bahamian insurance industry’s share of Hurricane Dorian losses is a collective net $85m, industry regulators revealed yesterday.

Jamel Bodie, the Insurance Commission of The Bahamas (ICB) supervision manager, told the Accountants’ Week conference: “We will go back to insurance companies before the end of the week to get an indication of what their losses look like. But for right now the net losses are sitting around $85m.”

While total Dorian-related claims payouts were last week pegged at between $1.5bn to $2bn, Ms Bodie confirmed that Bahamian property and casualty insurers will absorb a relatively low percentage of this because of the vast quantities of reinsurance cover they purchase annually. As a result, local carriers do not keep or retain a large amount of risk on their books.

While Dorian will impact Bahamian insurers’ solvency margins due to these losses and claims payouts, the Insurance Commission official said this would not be to the extent that would see them fall below the regulator’s prescribed capital ratio.

Ms Bodie added that Bahamian life and health insurance companies had informed the Insurance Commission that they intend to stick within he guidelines established by the Missing Person’s law, which means that a family member would have to wait seven years before being able to declare a Dorian victim officially dead.

Carl Bethel QC, the attorney general, responding to earlier suggestions made by Sir Franklyn Wilson, chairman of Arawak Homes and Sunshine Insurance, that the Missing Person’s law needed to be change following Dorian, told Tribune Business the existing Coroner’s Act enables the process for dealing with missing persons, who are presumed dead, to be speeded up.

Ms Bodie, though, said that until the law is changed insurance companies they will stay with the regulations outlined in the Missing Person’s law for “any varying reason”.

She then confirmed there will be a “merger” of the domestic Insurance Act and the External Insurance Act next year, explaining that the Insurance Commission wants to focus on the nature of the business rather than whether a firm is active inside or outside The Bahamas. A systemic levy of three percent tax or $20,000, whichever is greater, will be charged across different categories.

The Insurance Commission also plans to fully phase-in risk based capital requirements by 2022, even though the regulations were passed in 2018. It will be adding an “operational risk charge” in compliance with the International Association of Insurance Supervisors’ ICP-17 guidelines, while for general insurers the regulator will be doing a second round of quantitative impact studies before year-end. It expects full implementation of risk-based capital standards before the end of 2021.

Responding to criticisms that foreign adjusters were being let in without work permits and proper Immigration clearance vie letters of no-objections to conduct Dorian assessments, and disadvantaging local public adjusters, Ms Bodie said The Bahamas does not have enough professionals in this field to meet the tremendous demand post-Dorian.

She added that there was not sufficient time to have full consultations with the industry to deal with potential conflicts arising from foreign adjusters coming in and displacing domestic public adjusters.