Worldwide recession negatively impacting local insurers

POSTED: 08/12/11 7:22 PM

GREAT BAY – The St. Maarten Insurance Brokers Association (Siba) has told Members of Parliament that the state of the world economy has had three negative impacts on the local insurance businesses. The revelation was made a Central Committee meeting.
The three issues that have arisen are insured people choosing not to pay their premiums, the filing of more and more requests for payment plans and people choosing to stay uninsured. The brokers believe the solution lies in government activating the Guarantee Fund so that people will be able to share their premium costs with the government.
“The late payments or non payments that the industry is faced with now, means that we have to create larger reserves that prohibit us from investing in, for example, new staff,” Siba President Neil Henderson said.
No specific premium data could be provided to back the announcement that the recession is hurting the companies because this is not recorded centrally.
“We would suggest you attempt to obtain this information – premium data – from the Central Bank of Curacao and St. Maarten,” Henderson said.
The situation for the brokers is exacerbated by the fact that people are “buying insurance overseas.” They’ve now called for government not to give those people the same tax exemptions as people who have insurance with local firms as a means to reduce the flight of capital that takes place of this current construction. This would have effects for the government owned companies, many of which have insurance with foreign insurers.
“We would suggest that government take an inventory of how much premium income is sent overseas and calculate the positive effect that keeping that income will have on the local economy, including the creation of jobs,” Henderson said.
One area that people buy insurance from international insurers is medical coverage. Henderson explained that people tend to take those plans because they a broader scope than the “more territorial scope” adopted by local insurers. Those who choose medical coverage from foreign insurers usually end up spending more for their premiums. He also told MPs, in reply to a question from Dr. Lloyd Richardson, that the local insurance industry would be willing to work along with them to craft a solution that would allow them to offer more in terms of medical coverage.
The Siba president also used the meeting with MPs to announce they were willing to research the
Caribbean Catastrophe Risk Insurance Facility (CCRIF) and the necessary contacts so St. Maarten could become a contributor and beneficiary of the regional initiative, which is maintained by 16 member countries and territories. Henderson would admit he knew little about the fund, but news reports that St. Lucia and St. Vincent has recently received assistance had caught the body’s attention. A preliminary scan has led the Siba to believe that by paying into the fund, the government can significantly reduce what it budgets for unforeseen disasters and distribute it to other posts in the budget.
Henderson also informed MPs that flood insurance is available here, but cautioned that it was not readily available. The same applies to theft insurance for motor vehicles.
In reply to a question from United People’s (UP) Party MP John Leonard Henderson also made the recommendation that the elderly and people with existing ailments should be given a specific insurance category in the National Health Insurance system. Both groups, which Henderson labeled high risk, currently struggle to get medical coverage from insurers because the companies do not want to take on the risk.

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