The territory soon will join a regional insurance programme designed to dispense fast cash in the wake of natural disasters, according to Premier Dr. Orlando Smith.

Until this point, the Virgin Islands government has chosen not to participate in the multi-country risk pool known the Caribbean Catastrophe Risk Insurance Facility Segregated Portfolio Company.

This decision proved to be consequential in the aftermath of Hurricane Irma, when other disaster-battered jurisdictions like Dominica received CCRIF quick payments of up to around $20 million, but the VI received nothing.

Central government also did not insure any of its facilities except for the Central Administration Building, which had protection worth $32 million.

“Elements of” certain statutory bodies, including the BVI Electricity Corporation, the H. Lavity Stoutt Community College, and the BVI Ports Authority, also had insurance, according Brodrick Penn, the chairman of the Disaster Recovery Coordination Committee.

Still, government’s level of protection doesn’t come close to covering the level of projected losses.

According to the VI’s draft recovery plan, government expects a total of $56.7 million from insurance payouts. In November, however, Dr. Smith (R-at large) noted that preliminary damage estimates to central government-owned buildings alone exceeded $100 million.

 

UK pressure

The decision comes after pressure from the United Kingdom. In an effort to help the territory recover from the storm, the UK announced late last year it was offering the VI a loan guarantee worth up to £300 million.

In January, however, a document surfaced indicating the UK was requesting the VI implement a raft of good-governance and financial planning measures to accompany the guarantee.

Among the stipulations — which include things like a “public expenditure and financial accountability assessment” designed to map out reforms of the public sector and the immediate establishment of an independent recovery agency — was the request that the territory join the CCRIF.

“That is something that we will do,” Dr. Smith said during a press conference last week when asked about CCRIF membership. “It is something that we had considered before, but [there] is no doubt it is something that is needed, and we will do that.”

 

CCRIF details

The 17-member CCRIF SPC — established at the urging of the Caribbean Community in the wake of mass regional destruction from Hurricane Ivan in 2004 — aims to rapidly provide liquidity to regional jurisdictions impacted by extreme weather events.

After hurricanes Irma and Maria, for example, the facility distributed more than $20 million to Dominica; more than $15 million to the Turks and Caicos Islands; nearly $6.8 million to Antigua and Barbuda; and more than $6.6 million to Anguilla, all within the month of September.

The facility distributes payments determined by weather metrics like rainfall and wind speed, according to the CCRIF website.