Sabrina N. Gordon, Business Reporter
The mountains rise above the St. Lucian community of Soufrière where a game of cricket is under way in this December 3 file photo. St. Lucia and Dominica, which suffered earthquake damage on November 29, will receive insurance payouts under a six-month-old regional insurance policy.
The Caribbean Catastrophe Risk Insurance facility (CCRIF) is to make its first payout of US$1 million to Dominica and St. Lucia for earthquake damage from a November 29 tremor.
"Based on initial data from the United States Geological Survey (USGS), the earthquake exceeded policy attachment points in two of the 13 member nations that bought earthquake coverage," said Dr. Simon Young, supervisor of the CCRIF, a facility created under the umbrella of the World Bank and operational since June.
The CCRIF fund currently holds US$75 million - US$35 million of which is from donor pledges, while the remainder comes from premiums and fees from the 16 countries insured for earthquake and hurricane damage.
Another US$10 million is pending from other donors.
The earthquake, which had a magnitude of 7.4 on the Saffir-Simpson Scale, was felt throughout the Leeward and Windward islands, as far north as Anguilla and southwards to Guyana.
Policy payouts
However, according to the USGS data, the damage was enough to activate policy payouts terms only in tiny Dominica and St. Lucia, each of which are about fifteenth of the size of Jamaica.
Dominica, whose area is nearly 150 square kilometres larger than St. Lucia's 616 sq km, will receive just over half a million dollars, with the rest going to St. Lucia.
According to the terms of the insurance facility, payouts will be made in two tranches within a two-month period: an interim disbursement on the 28th day after the claim is lodged; and final payment a month later.
In the instant case, both countries will each receive interim payments of US$250,000 - St. Lucia today, December 12, and Dominica on December 13, said Young.
The final payment to both will be done December 27.
The calculations for the payout are verified by PricewaterhouseCoopers Cayman, under an arrangement that the audit and advisory firm has with CCRIF.
However, the policyholders, if they wish, can also do their own verification based on a formula outlined in the policy.
The CCRIF is a regional insurance fund for Caribbean governments, and is designed to limit the financial impact of catastrophic hurricanes and earthquakes on fiscal accounts, by the provision of cash to finance recovery from disasters.
sabrina.gordon@gleanerjm.com
