79.6 F
Cruz Bay
Thursday, March 28, 2024
HomeNewsLocal newsRules Committee OKs Insurance Regulation Bills

Rules Committee OKs Insurance Regulation Bills

Sen. Kurt Vialet at a Rules and Judiciary Committee hearing Thursday. (V.I. Legislature photo)

The Senate Rules and Judiciary Committee approved three bills Thursday that lawmakers said would bring the Office of the Lt. Governor’s oversight of insurance in the V.I. closer to accreditation by the National Association of Insurance Commissioners.

“What these bills actually do is create requirements within the code where there is going to be financial reporting, where there’s going to be laws that insurance companies in the Virgin Islands have to submit to the Office of the Lieutenant Governor their financial viability to be able to purchase re-insurance, and to practice in the territory,” said Sen. Kurt Vialet (D-STX), the bills’ primary sponsor.

According to Vialet, in the years since insurance laws were established in the territory, major
changes, including technological advancements, have altered the way people conduct
business, leading to the need to update the old laws.

“All 50 states across the nation, along with the territory of Puerto Rico, are accredited
and have adopted [NAIC] model laws, and the Virgin Islands is one of the last ones to
get onboard,” he said. “I think that this is a unique opportunity for us to be able to update laws that were created in 1968, and many that have not been revised from 1968 until the
present.”

Bill No. 32-0232 deals with life and health re-insurance agreements. Re-insurance is
purchased by primary insurers to cover their own losses, allowing them to remain
solvent after disasters like hurricanes that generate major claims. The bill gives the V.I.
insurance commissioner oversight to make sure that the re-insurer has the economic
ability to assume the risk undertaken by the primary insurer.

“We can’t have somebody that’s going to come in and purchase an insurance package,
and they don’t have any money, and then in the event of a natural disaster, they go
belly up,” said Vialet.

Bill No. 32-0233 provides for an annual audit and financial reporting to meet the
accreditation standards of the NAIC. It also aims to better protect policyholders by
updating the territory’s insurance laws and aligning them with standards adopted by
other U.S. jurisdictions.

Finally, Bill No. 32-0234 requires insurers to appoint an actuary who will prepare an
actuarial report, and allows the insurance commissioner to hire an actuary at the
insurance company’s expense, to review that report.

Lawmakers stressed the importance of the three bills in the wake of the devastating
2017 hurricanes.

“This is of particular importance given our recent experience with hurricanes, and given the fact that scientific consensus is that catastrophic windstorms will continue to increase in frequency and intensity due to global warming,” said Sen. Jean Forde (D-STT).

Forde also said he is drafting legislation based on Florida laws that will require
real property insurers in the Virgin Islands to provide coverage for windstorm damage.
He said some of his constituents were shocked to learn that the damage their
homes sustained from Hurricanes Irma and Maria were not covered because their
homeowners’ insurance policies excluded windstorm damage.

“In a jurisdiction such as this, such a situation is absolutely unacceptable,” said Forde.

Sen. Sammuel Sanes (D-STX) supported the three bills but reiterated his concern for
the lack of staff that will ensure the bill’s provisions, if made into law, are implemented.

During the Senate Finance Committee’s June 21 hearing, Gwendolyn Hall-Brady,
director of banking and insurance, indicated that an additional five government
employees may be required to enforce the provisions in the bills.

“To me, that is disheartening due to the fact that this body has passed excellent bills
that have been enacted into law but unfortunately due to lack of personnel we have
been unable to adequately implement these laws,” said Sanes.

The following committee members voted to approve each of the three bills and forward
them to the full body: Vialet, Forde, Sanes, Sen. Myron Jackson (D-STT), Sen. Janette
Millin Young (D-STT), Sen. Positive T.A. Nelson (ICM-STX), and Sen. Novelle Francis
(D-STX). Sen. Janelle Sarauw (IND-STT) was absent.

Print Friendly, PDF & Email
Keeping our community informed is our top priority.
If you have a news tip to share, please call or text us at 340-228-8784.

Support local + independent journalism in the U.S. Virgin Islands

Unlike many news organizations, we haven't put up a paywall – we want to keep our journalism as accessible as we can. Our independent journalism costs time, money and hard work to keep you informed, but we do it because we believe that it matters. We know that informed communities are empowered ones. If you appreciate our reporting and want to help make our future more secure, please consider donating.