Minister says CCRIF policy is still good

| 07/12/2008

(CNS): The Leader of Government Business, Kurt Tibbetts, has confirmed that the Cayman Islands will not receive anything from the Caribbean Catastrophe Risk Insurance Facility, a regional insurance policy which the government joined in the wake of Hurricane Ivan. However, Minister Alden McLaughlin has said it does not mean that government should cancel the policy because if the storm had hit Grand Cayman the country would have been in desperate need of the $40million that CCRIF says would have been paid.

Despite the fact that the wind speeds were high enough to trigger a claim, because Cayman Brac is neither the centre of economic activity or where government assets are located there will be no payout. While there has been much controversy surrounding the claim refusal, Minister McLaughlin noted that it did not mean that the government should cancel the policy.

“If Hurricane Paloma had not changed course we would be praising God that we had this policy,” he said, explaining that the government would then have received a substantial payout and the country would have needed it. “So, while Cayman Brac may have been seriously hit, the reality is less than 2000 people and a very small percentage of our economic activity and government assets have been affected.”

He explained that the parameters of the policy were aimed at the jurisdiction being able to rebuild its economy as quickly as possible on a macro scale. “With more than 96% of the population over here we can manage the Brac situation. This is not the dilemma that people are describing.”

Michael Nixon from the Portfolio of Economics and Finance said the CCRIF had confirmed that if Paloma had hit Grand Cayman with the same intensity, regardless of the damage, the government would have received around US$40 million. McLaughlin said the important issue now was for all the countries involved to look at whether everyone is happy with the trigger and how it works. “Let me go out on a limb, “ McLaughlin added. “It will be a huge error to throw away this policy over the failure of this claim onthe Brac. Had Paloma been just a few miles in our direction things would have been very different.”

The Leader of Government Business confirmed that the primary purpose of the policy was always to provide the government with a cash payout to assist with recovery and redevelopment from a macro-level. So it was always possible that if any of the member countries were badly effected in just one area by a hurricane, it would not necessarily trigger a payment because losses would be localised. He said Jamaica was refused a claim after a hurricane badly damaged a low populated and economically inactive area, whereas Turks & Caicos did receive a payout following a hurricane strike earlier this year as it hit government assets.

“The CCRIF is part of an overall diversified catastrophe risk management strategy to provide the country with a high degree of protection from the financial risks associated with our exposure to natural catastrophe hazards,” Tibbetts said, adding that government is using a combination of risk transfer, retention and reduction methodologies. “The main financial risk transfer mechanism used by the government is its Property Insurance Programme, which provides all-risk insurance coverage against physical loss of major government buildings and assets.

He explained, however, that even with such a comprehensive insurance programme in place, it is impossible to provide total financial risk transfer for government’s assets. The results of the CCRIF assessment on the claim were currently beingaudited by the accounting firm of PriceWaterhouseCoopers (PWC) and that report would be issued shortly, he said.

Cabinet would be meeting with officials from the CCRIF next week to discuss the CCRIF and possible enhancements to the programme coverage, and part of the discussions would involve geographic location and the fact the Cayman government might need to massage the policy, said Tibbetts, but he confirmed that the CI government was well able to take care of the Brac situation.

Government would be introducing a duty waiver for appliances and furniture on the Sister Islands for the next six months, he said. “Consistent with the decision made following the passage of Hurricane Ivan to grant concessions which assisted hurricane recovery efforts, on Tuesday Cabinet approved import duty concessions for Cayman Brac and Little Cayman on furniture and appliances, such as stoves, refrigerators, washers, dryers, dishwashers, microwaves and toasters,” Tibbetts said. “The normal duty rate on these items of 20% will be waived, effective 1 December 2008 through to 31 May 2009. These concessions are available to individuals as well as to businesses.  At that time we will review the waiver to see if an extension is needed.” He also noted that government would be watching prices on the Brac closely and ensuring the local businesses reflected the duty break in their prices to local consumers.

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  1. Anonymous says:

    Don’t despair too much Cayman Brac.  You will get all the rebuilding you need, compare your population to Grand Cayman, Grand Cayman will see you through, it just takes time, it’s not an overnight cure.  Re-building takes time.

    Don’t wish too much for better and high paying jobs, that is called progress and development, and the progress that comes with that is murders and violent robberies, rapes, etc.  Look at Grand Cayman.  Progress has a horrible price of crime attached to it.  I much preferred Cayman in the older days, i don’t like the new modernized Cayman, it’s stressful and very financially difficult.  Old time life was sweet.  I know progress of development will be made in Cayman Brac, there is no stopping it.  All one has to do is look at all the land for sale ads in Cayman Brac.  Who is selling the land over there?  Find out why they are selling it?  As a matter of fact, while you’re waiting for help to rebuild your home or business, i am sure the developers are right on track continuing in their developing.  Progress of development has a ugly price – crime.

    That’s my 2 cents for what it’s worth. 

    God Bless.

  2. Anonymous says:

    If people on the Brac were in a better financial postion to pay the astronomical amounts of money they have to pay to insure their houses, more of them would have their housese insured. Let’s take that back another step. If there was enough jobs and better paying jobs that people could actually get a job and make a decent salary on Cayman Brac, then Cayman Brackers would be in a much better position to pay the ridiculious prices that the insurance companies want. For some Cayman Brackers it is not possible to pay for house insurance on the salary they make.  We have to depend on the Government for almost all financial aide. And yes, it was my assumption that you pay insurance so that when you have a disaster occur you will get the necessary coverage to re-build. I didn’t expect that the money would come from the plan directly to the people, but I was under the assumption that some money would be paid over to the Government who would then distribute it as necessary to help with the re-building, taking into account that most people cannot afford to insure their houses.

  3. Anonymous says:

    Wow….the hostility here!!!

    From my understanding this insurance policy is a bit of a back up for Gov’t should we have another BIG hit. This would tell me that the policy is for Gov’t infrastructure first and foremost i.e. roads, clean up of public spaces and any shortfalls on it’s insurance programe. Why do we assume that Gov’t will re-build our home when we decide not to insure it or assume that this policy was going to pay to re-build it?

    I feel for the elderly that are retired with not much income and I am certain for those, Gov’t & private sector will come through for them.

     

  4. Anonymous says:

    Obviously YOU – Mr or Miss NEWFLASH! Don’t live on Cayman Brac and is NOT directly affected by what is happening up there!! I wonder what you had to complain about when IVAN hit Grand Cayman and you had to do without for sometime!!! I wonder if you were one of the many that ran to Cayman Brac looking for the little comforts that you were missing out on when Grand Cayman was in the same position that Cayman Brac is now in?! I wonder if you are one that has volunteered to go over there now and help with the clean up and re-builing, or if you have offered any help what-so-ever to help speed up the recovery process!?! Help me get that "chip off my shoulder" by doing your part in HELPING with the recovery process instead of adding to the frustration!!! And think back to where you were 4 years ago and how you felt after Ivan before you judge my feelings on this whole fiasco!

  5. Anonymous says:

    Hey, newsflash! Cayman Brac IS a minority! Cayman Brac gets more than its fair share from Govt. given its population. Take the chip off your shoulder. The trouble is that CYB politicians like to appeal to the politics of grievance and so this thinking gets ingrained. Govt. is helping. The private sector in GCM is helping. Enough already. 

  6. Anonymous says:

    Yet again….Cayman Brackers are left to feel like a MINORITY, for the lack of a better term when it comes to being a part of the Cayman Islands!!!!!!!!!!!!!!! So we get no coverage from the insurance and I wonder how much the Government is going to help out!??!! I’m sick to my stomach at how Cayman Brac and it’s people are always kicked to the back burner! We need help and yet again, it’s slapped in our faces that we are NOT getting the help! For the love of GOD where is the justice in all of this!!!!!!!!!!!! Basically this coverage is only good for Grand Cayman!!!!! NOT Cayman Brac! What the hell will it take for us to be treated fairly and as an EQUAL and NOT a BURDEN to our as so wonderful BIG SISTER!!!!!! What is the point in offering concessions when people don’t have the money to buy the stuff they need to re-build and re-paid their houses in the first place!!