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Financial & Insurance Companies failing Virgin Islanders - Skelton-Cline

-calls for 'safety net' to protect citizens in face of rising costs
Calling for a 'safety net' to support the services of local financial and Insurance companies in the Virgin Islands (VI), ZBVI 780am 'Honestly Speaking' radio host, Mr Claude O. Skelton-Cline says the lack of competition in the industry is making the VI an expensive to live. Photo: Facebook/File
According to the man of the cloth, with rising local costs, more needs to be done to increase the quality of life in the VI through policies and initiatives implemented by financial institutions in the territory. Photo: Internet Source
According to the man of the cloth, with rising local costs, more needs to be done to increase the quality of life in the VI through policies and initiatives implemented by financial institutions in the territory. Photo: Internet Source
BAUGHERS BAY, Tortola, VI - Calling for a 'safety net' to protect Virgin Islanders, ZBVI 780am 'Honestly Speaking' radio host, Mr Claude O. Skelton-Cline says the lack of competition in the financial and insurance industries is making the Virgin Islands an expensive place to live.

"Insurance is a challenge, continues to be a challenge... it's a sky-rocketing challenge and we must come up with an insurance construct that comes against the status quo, at least compete against the status quo that allows for a more affordable living in this country," he said.

Skelton-Cline was at the time speaking on the Tuesday, February 11, 2020, edition of his radio show where he noted that many Virgin Islanders are still reeling from the effects of hurricanes Irma and Maria of 2017, resulting in a high cost of living.

"We need to move beyond talking and put in an apparatus in place that is a safety net for so many hurting people out there... No matter how well off you and I thought we were, on the heels of those hurricanes we all saw exactly where we were. We were left naked," he said. 

Systematic approach needed - Skelton-Cline 

According to Mr Skelton-Cline, with rising local costs, more needs to be done to increase the quality of life in the VI through policies and initiatives implemented by financial institutions. 

"It's an expensive place to live in this place we call home, and their needs to be a cohesive, systematic, a strategic effort in how we will increase the quality of life but deflate the cost of living in this territory," he said.

Skelton-Cline said banking restrictions continue to be a major additional issue plaguing the territory.

"You can't get loans, be it mortgage, be it otherwise... something needs to change. There needs to be a greater demand placed on these institutions who have reaped the benefits of this territory from its citizens but are not giving back in proportion," he said. 

15 Responses to “Financial & Insurance Companies failing Virgin Islanders - Skelton-Cline”

  • preach (16/02/2020, 13:07) Like (4) Dislike (19) Reply
    Kodos to this man for always speaking up, he is absolutely right.
    • $16k per month (18/02/2020, 08:53) Like (1) Dislike (0) Reply
      It is expensive to live here because the Govt has to pay $16k per year to Claude 'Overspend' Skeleton Cline
  • Yep (16/02/2020, 14:06) Like (7) Dislike (3) Reply
    Blame blame wont do it...folks are not self reliant and continue to blame and to look for manor from the sky and their Gov. Prep for future is not in their plans..big vehicles and big house beyond their means and rainy day plans are non existent. Banks are in the business of lending so if they are not lending it is only because of a risk factor because they have been burned too many times.
  • E. Leonard (16/02/2020, 14:43) Like (5) Dislike (2) Reply
    Everyone wants economic security but an obstacle to it is the ever-present danger of risk or uncertainty concerning the occurrence of a loss. Insurance is a vehicle to lessen the impact of a loss; it is a group of people pooling their resources to cover/share losses. The greater the number of people pooling resources the cost is spread out over a wider base and the lower the cost per person. Further, the larger the pool the more closely insurance companies can calculate the premiums per person. The Law of Large Numbers states that as the number of exposure units (houses, cars, boats, people...etc) increases, the more closely will the actual loss experience approach the probable loss experience.

    The VI has a population of approximately 34000-36000 people and this small population size will result in insurance premiums being higher than in other locales than have a larger population. To stay solvent and operational, insurance companies( property, medical, auto.....etc) have to charge higher premiums. And due to the high cost many property owners may forego buying insurance, for example property insurance. Further, instead of buying complete replacement cost insurance, they gamble and go for lower cost underinsurance. Moreover, the complacency developed due to the VI not being directly hit by a major hurricane for decades may be a factor for some property owners not having insurance. The VI is highly vulnerable to natural disasters, ie, hurricanes, earthquakes, flooding.....etc so it is not if but when for example a major hurricane will hit.

    Moreover, there are no easy solutions to this issue, this crisis. As noted earlier, the higher contribution pool, the lower the premiums. Government may need to collaborate with other regional sister countries about the possibility of participating in a larger pool. Additionally, insureds should more actively manage perils, the cost of loss, and hazards, condition that creates or increase the chance of a loss, ie, physical, moral, and morale. Government and other stakeholders should partner and launch a public education and outreach programme on insurance. Perhaps as an incentive to buy full replacement cost insurance on property, government can make the cost deductible (credit) on income taxes. This should be not an invitation for insurance to raise rates; their rates should be fair and reasonable.
    • RealPol (16/02/2020, 16:02) Like (9) Dislike (2) Reply
      The number may be more dire than the approx 34,000-36,000 population. Wonder how many property owners are there in the VI? Know that the pool is way below the 34-36000. The other thing that was mention is that Banks is not lending. Well, banks are in the business of taking in deposits, paying little or no interest on them and lend them out at high interest. That is their MO. So if they are not lending, there must be a reason, ie, risk.....why they are not lending. Is their reluctance due to racism, discrimination, national origin, religion, disability, sexism, socioeconomic status, geography, neighborhood.......etc.? Are all the banks colluding and refusing to lend to locals?
    • Disgusted Insured (16/02/2020, 17:08) Like (2) Dislike (4) Reply
      @E. Leonard, you must be in the insurance business, taking up for them. Insurance companies are a bunch of scamps. You pay them for decades and when you file a claim, they give you a hard time and even if they pay you pittance on your claim, they then raise the premiums. Bunch of thie...s. After paying for collecting for decades without pay out, they should give you a rebate. Since the hurricanes, premiums have skyrocketed, increasing fourfold from prestorm. They need to be investigated for probable dishonest practice but who has the stones to do that. Sure not government. We have no representation. Banks and loans are another lost cause. They tek your money and charge high interest for a loan if you get one. It is easier for other people to get a loan.
    • Disinterested (16/02/2020, 23:31) Like (2) Dislike (0) Reply
      Over the years, reading comments and talking to family, friends, co-workers, acquaintances.......etc there seems to be a misconception about insurance, ie, property, casualty, health.....etc. Insurance is a contract between the insured and insurer for a specific period, ie, monthly, quarterly, biannually, or annually. Once the period lapses, a new contract has to be put in place if further coverage/protection is needed. However, invariably what happens is that insureds lament that they have been with Company XYZ for many years and haven’t had the need to file a claim so then insurance company is getting over on them. Well, because no claim needed to be filed, doesn’t mean that the insurance company is getting over on the insured. The insurance company is assuming the the risk and if the insured filed a legit claim, the insurer would have to process the claim consistent with the contract. Further, the point on the size of the pool is an important one. Based on the size of the pool(the larger the better), actuaries...............etc can closely approximate the size of premiums that each member need to pay. No doubt some insurance companies put up all kinds of obstacle to avoid paying claims. In such cases, the insurance regulator should get involve to ensure that the insured is made whole for a legit claim. After a major disaster, some insurance companies may lack the resources to pay out claims and may fold up tent and leave the market.
  • SMH (16/02/2020, 15:40) Like (8) Dislike (3) Reply
    People need to speak about things that they understand instead of babbling foolishness. What we need is proper education and adequate legislation in place to deal with such things. The ignorance being spewed here is the exact reason for our issues, people responsible for things which they are totally clueless about! What research has been done before coming up with such accusations?
  • Outside looking in (16/02/2020, 15:41) Like (6) Dislike (2) Reply
    But I know enough to comment. The BVI is in a quagmire. You all have a number of forces that are not counter balanced. You believe because you have brown elected officials you are protected but that is not true. The greenback ONLY is what runs the economy, which in turn dictates your policies. Policies are geared towards attracting and retaining businesses, but no one is making sure risk is reduced in terms of overall impact on the local or as ome may call it indigenous, population. For starters;

    Where is your affordable housing policy so as housing cost increases you are not leaving those at the bottom out in the cold?
    Where is your consumer protection policy to prevent insurance companies and expat realtors from under valuing the homes of locals? Then when the hurricanes hit the insurance companies could justify less payout for repairs because the locals who did have insurance were underinsured strategically for less than replacement value? Some locals who had retirement savings had to exhaust those funds to fill the gap that insurance should have covered. So now the are back in the poor house in retirement.
    Where is your consumer protection policy and education awareness campaign to combat insurance companies selling expensive universal whole life policies to both young and old when particularly the younger ones could have purchased fixed cost term life for significantly less while investing the difference and coming out ahead, leaving their children a legacy. The only people getting wealthy from those policies in the BVI are the insurance agents. Some of those agents themselves don't fully comprehend the product they are selling locals. So you know the policy holder didn't understand what they purchased. Had some instead reduce the whole life cost and insured up to 80% of the replacement value of their home they would be in a better place. In some case some of our people who know better are also too cheap.
    Where is your policy against redlining so expat realtors can stop devaluing locals' homes and land. And stop renaming communities as part of the plot to market certain areas to expats only? Until a host of these issues are addressedcyou will have a job just talking about the problems and no action.
  • TALK THAT (16/02/2020, 17:03) Like (8) Dislike (0) Reply
  • rape (16/02/2020, 19:13) Like (2) Dislike (0) Reply
    The banks pays less than 1% interest but chsrges 13%.this is c financial rape pf the. Highest order. But no one complains because there is no alternative and there is no legislation to stop tbem.
  • Socrates (17/02/2020, 07:08) Like (2) Dislike (0) Reply
    1. Who is the insurance regulator in the VI and is he/she providing effective oversight?
    2. Who is responsible for the proper insurance debacle in the VI, the customer or the agent?
    3. Was the agent pushing underinsurance to sell more policies? If so was the customer ill-served?
    4. Was the customer properly briefed on the down side of underinsurance?
    5. Was the customer briefed on the importance of the 80% rule?
    6. Did BVI property get complacent because no major hurricane made a direct hit in decades?
    7. Does the building code needs to be upgraded?
    8. Does government need to perform better inspection of construction to ensure building code is being followed?
    9. Should government subsidize property replacement cost insurance?
    10. Is stronger oversight of insurance companies doing business in the BVI needed?
    11. Do insurance agents need to be licensed and bonded?
    12. Should insurance companies have to post a bond?
    13. Is government self insured?
    14. Should government seek membership in regional pool to lower cost?
    15. Should insurance fraud be dealt with harshly?
    16. Should insurance companies have a maximum amount of time to resolve a claim?
    17. Other than the court where can customers go to resolve disputes?
    18. Should government enter the insurance business or leave it to the private sector?
    19. Is the Law of Large Numbers really a factor in insurance cost in the BVI?
    20. Should insurance companies have to rebate customers who have not file a claim?
    • Athens Street Corner (17/02/2020, 11:03) Like (2) Dislike (0) Reply
      @Socrates, the original Socrates may be well pleased. Lawd ah merci, you killing ah ve with questions.’ Anyway, I got a question of my own. What is the 80% rule?
      • Socrates (17/02/2020, 13:08) Like (2) Dislike (0) Reply
        @Athens Street Corner, my thing is asking questions. Nevertheless, here is my attempt to answer your, “What is the 80% rule.” Typically, in the property insurance universe, if a property owner insures his/her for at least 80% of replacement cost, a partial lost would be reimburse up to the amount insured for. For example, if the full replacement cost of a property is $300,000 and if the property owner insures it for $240,000 and experiences a loss of $150,000 the full $150,000 would be reimbursed. On the other hand if the property was insured for 70% ($210,000), the full $150,000 lost would not be reimburse. Further, at 70%, only $131,000 would be reimburse(210/240)X150).
        • RealPol (17/02/2020, 16:19) Like (2) Dislike (0) Reply
          The reality is you insure at 80% of replacement cost to get back 100% of a partial lost up to the maximum of the policy. I can see why people would gamble with the 80% option, for the chance of experiencing a total lost is slim. I’m not endorsing it though; I go for full replacement cost, though getting a claim process is like pulling teeth. @SMH, you say the people don’t know what they talking about so what is the real story? Give us real talk, eh!

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