STATE Minister for Finance Michael Halkitis yesterday defended the government’s decision to drop its regional insurance policy for disasters for a sovereign disaster relief fund.
Mr. Halkitis underscored that the country has never been able to access funding from the Caribbean Catastrophe Risk Insurance Facility (CCRIF), adding that New Providence would have to suffer a direct hit from a category five hurricane in order to make a claim.
He was responding to questions on the regional insurance scheme posed by Opposition Leader Dr. Hubert Minnis, who asked whether the country’s policy had lapsed during his contribution to the $150m bond resolution yesterday. Dr. Minnis noted that Haiti had already mobilised $20m from the insurance plan.
Standing on a point of order in the House of Assembly, Mr. Halkitis said: “The government of the Bahamas has been a member for many years, paid its premium and never been able to access. In order for us to ever get a claim under the CCRIF, New Providence would have to be hit by a category 5 hurricane.
“The government made a decision, instead of continuing to pay where there was no chance of us ever being able to claim, we decided to establish the disaster fund.”
He added: “There was virtually no circumstance where we could have claimed. No insurance policy lapsed, we took a decision after advice to discontinue, the threshold was just too high.”
The Caribbean Catastrophe Risk Insurance Facility (CCRIF) is a regional disaster fund for Caribbean governments to quickly access financing to limit the financial impact of devastating hurricanes and earthquakes. It was developed as a technical project by the World Bank, and has since been restructured into a segregated portfolio company with extended membership to Central American countries.
According to its website, the facility has made 21 payouts totalling approximately US$38.8m for hurricanes, earthquakes and excess rainfall to 10 member governments.
Further to this point, Prime Minister Perry Christie yesterday lamented the country’s challenge in accessing concessionary lending as a developing country due to its high per-capita income.
“I sat with persons who lead that programme (CCRIF),” Mr. Christie said, “who pointed out the contradictions of the programme as Barbados qualifies and the Bahamas doesn’t, that we have a category four (hurricane) impact on islands that are extraordinarily vulnerable and they disqualified us in that regard. It was that thinking that led to the Bahamas deciding that it would rather insure itself by making contributions.”
He added: “All matters to do with qualifying the Bahamas for concessionary lending we are disqualified because of our per-capita income. The World Bank have not moved away from the position that the Bahamas’ per-capita income disqualifies it from accessing concessionary financing.”
By Ava Turnquest, Tribune Chief Reporter
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