Shadow Minister of Finance Chester Cooper claims the government made an "egregious and expensive error" when it decided to renew the Caribbean Catastrophic Risk Insurance Facility (CCRIF) policy the former administration dropped.
Cooper said because the government will only receive a payout of $234,000 after paying an annual premium of $2.6 million, The Bahamas will lose out.
"I am intimately familiar with the insurance industry, and it is a ridiculous notion that you will renegotiate a policy that has already taken effect with a potentially significant claim pending," Cooper said.
He was responding to comments Deputy Prime Minister and Minister of Finance Peter Turnquest made last week that the government wants to renegotiate the way payouts from the Caribbean disaster insurance facility are triggered by dividing The Bahamas into zones.
Cooper said, "Perhaps the minister intends to negotiate better terms on the next policy.
"However, this begs [a] question: Why did the Minnis administration not properly assess and negotiate the current policy before signing it?
"On the face of it, it appears, in a time when the Free National Movement is preaching fiscal discipline and trimming government expenditure, the Minnis administration negotiated a deal that cost The Bahamas some $2.4 million it may never recoup.
"We look forward to the government explaining the circumstances of the current CCRIF in full view of the public, given its commitment to transparency and accountability.
"It appears that in the new government's haste to find a smoking gun, it made an egregious and expensive error to which they must be held to account.
"The PLP supports identifying suitable mitigating strategies to natural disasters, given that we live in a hurricane zone.
"We anticipate that the government will be able to design over time an appropriate facility drawing on the expertise resident in the private insurance sector."
On Thursday, Turnquest told The Nassau Guardian that the government must take the risks associated with the insurance premium in order to protect its assets.
In a press release on Wednesday, the CCRIF announced that Hurricane Irma triggered payments of approximately US$29.6 million, with The Bahamas receiving $234,000.
The insurance facility explained that the calculations for The Bahamas were not made based on the impact of Irma, but on the aggregate deductible cover (ADC).
During the budget debate, Prime Minister Dr. Hubert Minnis revealed that following Hurricane Matthew, The Bahamas would have received a payout amounting to about $32 million, which would have been the single largest payout to a country from the CCRIF.
However, The Bahamas missed out on receiving this payment from the CCRIF because the Christie administration did not pay the premium.
Opposition Leader Philip Brave Davis defended the former administration's decision to withdraw from CCRIF, saying it was advised that it was unlikely that The Bahamas would benefit from it.
In his statement, Cooper said, "Though the prime minister has promised to table information regarding the low payout by and apparently exorbitant premium paid to the CCRIF with respect to this budget cycle and Hurricane Irma, there are some critical questions that bear asking.
"First, of course, is the essential question: How much was paid for the latest annual premium?
"I understand that the amount paid exceeds $2.6 million, which would be more than double what the Christie administration last paid before cancelling the policy -- a move the Minnis administration has been highly critical of.
"Second: Why was the policy continued, despite the advice of experts that it [should] not, without further examination of the risks versus benefits?
"Third: Why does the minister of finance now say he will seek to renegotiate the terms of the policy after having already paid for the contracted policy?
"Fourthly: If it is a group policy, how does the minister anticipate being able to negotiate the terms more favorable to The Bahamas than its joint-insureds?"

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