STATEMENT BY PREMIER AND MINISTER OF FINANCE DR. THE HONOURABLE ORLANDO SMITH, OBE
DURING THE TWELFTH SITTING OF THE SECOND SESSION OF THE THIRD HOUSE OF ASSEMBLY OF THE VIRGIN ISLANDS
ON THURSDAY, 14TH DECEMBER, 2017 AT THE HOUSE OF ASSEMBLY
ARBITRATION CENTRE, RITTER HOUSE, ROAD TOWN, TORTOLA
AT 10:00 A.M.
Statement on Insurance Company Review
Madame Speaker, immediately following the passage of Hurricane Irma, on September 11 I held a meeting with the Territory’s insurance providers and one with the Territory’s banks at the NEOC, which was at the hospital at that time. In that meeting, insurance companies assured the Government that they are ready to address claims and I was surprised that two companies had already started their claims process during those very uncertain days. I also received assurances that their re-insurers were prepared to pay out claims.
Even in those early days, we knew how challenging the road ahead would be and how important it was for residents and businesses to recoup the protection that insurance provides its users, to help people rebuild their homes, restore office spaces and help us all to put our country back together.
We buy insurance for that rainy day Madame Speaker, for that time a significant event happens and we want to safeguard ourselves. We purchase insurance to protect our investment. September 6 and Hurricane Irma was more than a rainy day Madam Speaker. It is a day that still haunts many residents, and unfortunately, that trauma seems never-ending for residents battling with insurance companies.
On Tuesday, December 5, I had a follow up meeting with the insurance companies and also the banks to get an update on issues raised by the public on the claims process, the timely resolution of claims, disparities in estimated costs of damages and settlements, the pricing of salvaged vehicles and new increased premiums faced by residents.
In the meeting, I also stressed the urgent need to get claims processed so residents can rebuild their homes and have safe housing for those that are still displaced, and for commercial properties to be restored to bring back services that have been disrupted. I will continue to have these meetings with these two sectors to ensure concerns of the public are being addressed.
My government understands the critical role both insurance companies and banks will play in the rebuilding of our Territory. We also recognise that the policies of these two industries must be monitored closely.
Madame Speaker, Government has already begun to find ways to address the complaints of individuals. On December 4, we passed the Financial Services Business Continuity Act 2017. Within that act there is provision for the establishment of an Insurance Tribunal. Before the end of the year we expect to appoint members of the community and industry to the Tribunal to support residents wishing to investigate, report or have some meditation before claims are finalised.
I rise this morning to inform this honourable house Madame Speaker, that it is through this Tribunal, that I will be asking the Financial Services Commission to complete a review of the practices of insurance companies and banks following the passage of the August floods and Hurricanes Irma and Maria.
We realise that for some residents, Hurricane Irma came in the midst of them trying to rebuild their lives and businesses following the August floods. From the August floods, I’ve been made aware of complaints about insurance providers by residents. Considering all that we’ve just experienced, even I now have a different appreciation and understanding of the policy that was advertised and what I bought.
Nonetheless, residents do expect to utilise the insurance they have signed up for and are paying for when that rainy day comes. It is essential to use this opportunity post Irma, to listen to residents, providers and banks and see what lessons we can learn from this experience and how we can protect the interests of our people.
Following the passage of these weather systems, we have heard even more about how the Caribbean must prepare itself for similar weather conditions as the effects of climate change become more evident in our lives. So it appears Madame Speaker that there is a possibility for more rainy days and insurance should provide the protection required for those days and our banks must be prepared to be flexible in such unprecedented circumstances.
Out of this review, Madame Speaker, it is my hope that an understanding of procedures to date will properly inform changes to legislations and practice procedures of the industry, and particularly, more public education on insurance policies so residents understand what they are purchasing and can make informed decisions when purchasing policies or selecting an insurance or banking service provider.
My office will be paying particular attention to the present claims process and banking concerns, and monitoring the payout and timing of claims so that residents can have some resolve, so that collectively we can get on with the business of rebuilding the Virgin Islands. Thank you, Madame Speaker.