Archive for March, 2009
Hijab dilemma in Norway
(Christian Science Monitor): Norway’s biggest headache right now is not the financial crisis. Rather, the predominantly Christian nation is plagued by a religious dilemma over the right of a Muslim woman to wear a hijab as part of her police uniform. As the controversy has escalated, the country has seen the physical collapse of the justice minister, the public burning of a hijab, and a substantial rise in the popularity of Norway’s anti-immigrant opposition party just six months before general elections. This is odd for a country known for religious tolerance, generous international development aid, and peace efforts worldwide.
Health insurance to cost more
He continued, “There is a general consensus that the current level of health care benefits listed in the Standard Health Insurance Contract (are) not in line with today’s healthcare costs. However, I caution that any legislated increase in benefits will be matched with increased cost of premiums for employers and employees.”
He said that if the country was to ensure optimal well-being for all, affordable health insurance was needed. He said that the Health Insurance Commission Board had made recommendations to his ministry on an enhanced Standard Health Insurance Contract (SHIC1) plan of benefits and had engaged an overseas company to derive a premium rate for providing benefits under a new proposed Standard Health Insurance Contract.
The minister said that the report states: “…expanded benefits under the new plan would lead to significant increases in premium rates, and the segment of the insured population that would be most affected by the premium increases are persons insured only for SHIC 1 benefits (those without supplementary benefits).”
The current premium rate for the Standard Health Insurance Coverage range from $67 – $120 per month, and before revising the law government must ensure that the mandatory plan of health insurance benefits is not only adequate but is also affordable to the average employee/employer, the minister said .
“Amending the standard health care plan is clearly not a decision that government can make in a vacuum,” he said “As the minister who introduced mandatory health insurance coverage in these islands, I wish to remind everyone that the Standard Health Insurance Contract was meant to cover on-island care, brought in to transfer some of the cost from government to the private sector.
He added that insurance was never meant to cover catastrophic care overseas, but provide people, at the very least, access to inpatient service at our local hospitals. But to the best of his knowledge no one – Caymanian or non-Caymanian – has been denied access locally to urgent healthcare services due to a lack of adequate health insurance coverage.
This, however, contradicts various media reports in recent times, including the case of Shellesha Woodstock, who gave birth to a premature baby aboard a Cayman Airways flight to Jamaica after being told by HSA officials, while in labour, she could not have the child in Cayman. There have also been numerous reports of people on basic health care packages not being able to receive critical care as the package in insufficient to cover airlift or services from overseas medical centres. Carol Romero, an employee of Blockbuster Video at Grand Harbour, died last month after she was run down by a drunk driver, and the fact that she had insufficient coverage was cited as a contributor to her death as emergency centres in overseas jurisdictions refused to take her. While the CI government often guarantees the excess costs for Caymanians in need of critical overseas care, this is not the case for work-permit holders.
The minister stated that there was a need to cost-effectively bridge the gap between the benefits in the basic standard plan and those in what is called the premier plan, and he said the issue of affordable health care insurance for all remained high on his ministry’s agenda, but did not offer details of when changes would be likely to take place.
Insurance rules implemented
CINICO reveals losses to Legislative Assembly
(CNS): CINICO continues to run at a loss. However, at least at least the people of the Cayman Islands know this is the case for the government owned insurance company since it is one of the first government entities to complete its 2007/08 annual report. Many others have still to file their reports for 2007/08 and some have yet to complete for previous financial years as well. Minister for Health and Human Services Anthony Eden laid the CINICO report on the table of the Legislative Assembly on Thursday morning, saying it had reduced its operating losses from $6.5 million to $200,000 due to a capital injection from government.
CINICO (the Cayman Islands National Insurance Company) is a wholly government-owned insurance company which was formed to provide health insurance coverage to civil servants (employees and pensioners) and other residents of the Cayman Islands who historically have had difficulty obtaining coverage through their employer or the private insurance market. As a result it is difficult for the company to collect premiums that match its outlay. However, the minister said that an industry indicator of how viable an insurance firm is relates to the operating expense to payment ratio, and he said CINICO exceeds the industry benchmark of 15% as its is only 11%.
The minister explained that, as a class A insurance firm, it has to be compliant with CIMA regulations, but was not because of the significant shortfall in premium collection — hence the need for a significant capital injection from the shareholder, which is government. “It is now fully compliant,” he added. “Despite the difficulties CINICO is committed to addressing the historical negative performance.”
Although this government company has revealed its continuing losses in its report, at least the people of the Cayman Islands can now read how much CINICO is costing them. Most other government entities have not yet provided their 2007/08 accounts to the LA.
Despite the fact that many government entities remain significantly delinquent in their account reporting, as first revealed in July of 2008 by Auditor General Dan Duguay’s report, State of Financial Accountability reporting, CNS can confirm that the Public Accounts Committee will not meet to question financial officers over this issue before the Legislative Assembly is dissolved on Tuesday.
International hunt for worm
(New York Times): An extraordinary behind-the-scenes struggle is taking place between computer security groups around the world and the brazen author of a malicious software program called Conficker. The program grabbed global attention when it began spreading late last year and quickly infected millions of computers with software code that is intended to lash together the infected machines it controls into a powerful computer known as a botnet. Since then, the program’s author has repeatedly updated its software in a cat-and-mouse game being fought with an informal international alliance of computer security firms and a network governance group known as the Internet Corporation for Assigned Names and Numbers.
Tax deals too little too late, says Bush
(CNS): Although government now has some 15 Tax Information Exchange deals in place, the leader of the opposition has questioned why so few have been signed in the last four years. Yesterday, government announced it had completed agreements with another seven European countries, including Germany, to add to the existing deals signed with the Nordic group and the US. This means Cayman has now met the OECD standard, which states that 12 deals would qualify a country as transparent.
McKeeva Bush said Cayman made an advanced commitment to the OECD several years ago on tax matters but that he has seen no evidence that the government had implemented any of the measures it promised.
"The BVI and other competing jurisdictions have signed several Tax Information Exchange Agreements. And yet the PPM has sat idly by for years as our competitors come good on their various international commitments, exposing Cayman to the risk of being blacklisted again. They are only now trying to play catch-up in preparation for the general elections. But the reason that the pressure is so severe on this country in relation to financial services matters is directly because the government has done next to nothing over the past 4 years,” he said in a statement.
Bush said that he had written to Financial Secretary Ken Jefferson (whose portfolio, rather than Alden McLaughlin’s ministry, as is sometimes perceived, is actually in charge of the Financial Services Sector) expressing his concern over the lack of progress on the Cayman Islands commitments to the OECD.
He has also accused the government of attempts to ‘step into the limelight’ on what he described as a last-minute scramble on the recent initiative taken by the Cayman Islands Financial Services Association to address the looming international challenges to the financial services industry.
“I have written to the government asking for clarification on what has been done and to better understand why we are now in this position,” Bush added. “The government campaigned on the basis of accountability, and they should now explain to the public why they have waited until the very last minute to address these very important matters. We are talking about an industry that employs thousands of Caymanians and generates at least 30 percent of all government revenues. This neglect is shameful.”
The leader of the opposition praised the private sector move to lead the country’s international promotional and lobbying efforts and said nothing of its delay in making a concerted effort to respond to the crisis. “I am very pleased to see the private sector taking action at a time when the international challenges to a key economic sector are so severe. But clearly the private sector was forced to act in such an urgent manner because the industry has been neglected by the PPM administration for years,” Bush added.
He said that while the PPM has rushed to push through a number of bills recently relating to the financial services industry, the government has been heavily criticised in many quarters of the sector and at times by the local media for its handling of the international challenges to the industry. Representatives within the financial services sector argued at a Chamber of Commerce luncheon earlier this year that lobbyists for the financial services sector either were not in key places, such as Washington or London, or they were not effective.
“During my term, we felt that our financial services industry needed official support on the ground in those key locations. Our role as government was to be a facilitator. If the industry felt that Asia, for example, was a key market opportunity, it became our duty to ask what how we could better facilitate their efforts. That is how we operated. Over the past four years, we have witnessed a government that has ignored the financial services industry until the eleventh hour.”
Bush says he adopted an aggressive international relations and lobbying strategy during his previous term as leader of government business and he said a business cannot run properly without promotion. “So how can you take that approach with an entire industry that supports the livelihoods of Caymanians?” he asked. “The government must be held accountable for allowing such a poor state of affairs in our financial services industry,” said Bush.
Kill a polar bear for $35,000
(The Independent): Boyd Warner treasures the memory of killing his first polar bear. It was 2003. For days he had stalked his prey on the frozen wastelands north of Pond Inlet, one of Canada’s most isolated Inuit communities deep inside the Arctic Circle. His dog team picked up the scent of an eight-foot adult male and they hurtled over the ice: the hunt was on. "It was one of those beautiful Arctic days," recalled Mr Warner. "We’d had about 14 hours of sunlight and were completely surrounded by nature."
Cayman link to fund collapse
(Financial Times): A $639m (£440m) London hedge fund collapsed on Thursday night after the discovery that the main asset of Weavering Capital’s flagship fund was a $637m derivatives trade with an offshore company controlled by the fund’s founder and chief executive. Weavering Capital called in administrators on Thursday and its Weavering Macro Fixed Income fund was put into liquidation in the Cayman Islands, after claims the trade could not be paid. Weavering froze the fund a week ago after discovering the position and calling in PwC to investigate.
Candidates have only one day for nomination
(CNS): The only day when eligible people may be nominated to stand in the forthcoming General Elections 2009, Nomination Day, is one the most important dates in the election campaign calendar. Kearney Gomez, the elections supervisor, said this year this key day falls on Wednesday, 25 March, the day after parliament is officially dissolved. In each of the six electoral districts would-be candidates may be nominated for the district’s seat or seats in the Legislative Assembly in the General Ele
He added that anyone who nominates a candidate and is not registered in that district or who knows that the candidate is not qualified is guilty of an offence. The penalty on convi
Nominations can take place between 8:00 am and 3:00 pm at the following venues:
West Bay: John Gray Memorial Church, 26 West Church Street.
George Town: Church of God Chapel (Family Life Centre) 48B Academy Way (off Walkers Road).
Bodden Town: James M. Bodden Civic Centre, 445C Bodden Town Road.
North Side: Craddock Ebanks Civic Centre, 923 North Side Road.
East End: William Allen McLaughlin Civic Centre, 80 John McLean Drive.
Cayman Brac & Little Cayman: District Administration Building (2nd Floor Conference Room) 19 Kirkconnell Street.
District Returning Officers will receive nominations between 8am and 3pm.
Nomination forms may be collected any weekday between the hours of 8:30 am and 6 pm from the Ele
Following nomination day the revising officer will begin settling the list of electors for each disrict at the court hosue in George Town for the four districts with objections on Grand Cayman and at the district adminstraiotn buildingon Cayman Brac.
Government signs more tax deals
(CNS): The Cayman Islands government has taken advantage of the Tax Information Authority Law passed late last year enabling it to sign request agreements with seven more European countries. The law allows Cayman to sign deals which do not require a bilateral treaty but enable requests to be made in relation to both civil/administrative as well as criminal tax matters.
The latest seven countries are Germany, Austria, Belgium, Czech Republic, Luxembourg, Slovak Republic and Switzerland. “The Cayman Islands was one of the first jurisdictions to commit to OECD standards for transparency and exchange of information in tax matters. We have upheld that commitment by working with OECD and non-OECD colleagues to design effective standards, by reflecting those standards in our domestic regime, and then embarking on a programme to extend assistance arrangements to other countries, the first being our tax information agreement with the US signed in 2001,” said Leader of Government Business, Kurt Tibbetts.
“Our actions today in extending tax information assistance to seven more countries is the culmination of many months of technical work, and we are especially grateful to Germany for the insight they were able to provide by virtue of having a unilateral mechanism for cooperation in tax matters themselves.”
The unilateral mechanism is complementary to Cayman’s bilateral negotiation programme. The latest development in that area was the conclusion of technical negotiations with the Nordic countries for a series of bilateral agreements, including tax information agreements. The seven tax information agreements are currently going through the political authorisation process on both sides, to enable execution at a signing ceremony in Stockholm on 1 April 2009, with the commercial agreements to follow in June 2009.
Tibbetts stated that the Cayman Islands is still looking forward in the immediate term to concluding bilateral arrangements with the United Kingdom.
With pressure mounting on offshore financials service centres as a result of the Stop Tax Haven Abuse Bill by Senator Carl Levin as well as the forth coming G20 meeting where a list of jurisdictions facing potential blacklisting will be discussed, one which currently includes Cayman – the need to demonstrate openness and transparency may be critical to the future success of Cayman’s Financial Services.
The IMF recently concluded an assessment of Cayman, details of which have yet to be revealed, and Michael Foot is currently here leading a delegation from the UK Treasury reviewing the industry as a result of instructions in the UK Chancellor Alistair Darling’s Budget review.