Claudine Housen, Staff Reporter
GOLDING
WESTERN BUREAU:
OPPOSITION LEADER Bruce Golding says the establishment of a regional reinsurance fund is not the answer to risk management preparedness in the Caribbean.
The concept of a regional reinsurance fund was first put forward by Dr. Dennis Lalor more than 25 years ago but regained regional appeal last year when, following the onslaught of hurricanes in the Caribbean, the World Bank asked that a feasibility study be carried out.
The advocates of the proposal argue that a regional insurance fund would result in greater premium retention, increase the capital base of regional insurers, expand market capacity, reduce premiums and widen insurance coverage.
However, Mr. Golding said on Monday that a regional insurance fund was not feasible given the economic climate in the Caribbean.
"I am not convinced that a regional reinsurance fund would be able to offer rates more attractive than those from external reinsurers which pool ours with worldwide risks," he said.
Mr. Golding was addressing delegates at the Joint Regional Conference of the Insurance Association of the Caribbean (IAC), Life Insurance Marketing and Research Association (LIMRA) and Life Office Management Association (LOMA) in Montego Bay, St. James.
He added that even with the reduced options, in terms of international reinsurers, he did not see how the region could position its individual country risk with a pool that is so limited when each member country of the pool has the same kind of risk and disaster.
"You only need one good disaster, as far as I am concerned, that will wipe the fund out altogether," Mr. Golding continued. "A much more creative view is the proposal by CARICOM for the creation of a Catastrophe Risk Insurance facility that would enable governments to purchase insurance against natural disasters".
Using the example of Grenada, IAC President Earl Moore also questioned the feasibility of such a fund.
The 26th Annual Caribbean Insurance Conference was held under the theme: 'Oh Katrina ... We must survive'.
