By NEIL HARTNELL
Tribune Business Editor
THE National Insurance Board (NIB) sought simultaneously to make a company owned by a Cabinet Minister’s mother the ‘broker of record’ for both its group health and property insurance business less than two months after the 2012 general election.
Documents obtained by The Tribune show that NIB imposed A Scott Fitzgerald Insurance Brokers and Agents Ltd into the existing medical insurance contract for its employees, which was held by BISX-listed Family Guardian, in late June, 2012.
The company, which is owned by the mother and family of Jerome Fitzgerald, Minister of Education, Science and Technology, was introduced as the group health insurance broker at exactly the same time as NIB tried to give it the same role for its property and casualty business.
The commission for insurance brokers is typically three per cent of a policy’s premium amount and, given the size of NIB’s workforce and multi-million dollar property portfolio, A Scott Fitzgerald Insurance Brokers and Agents would likely have earned a six-figure sum from these contracts according to industry sources.
Those sources suggested that the company’s insertion into a group health contract that had already been placed meant it stood to get “thousands of dollars” in commission fees without “doing anything to get it”. And they raised questions over whether A Scott Fitzgerald Insurance Brokers and Agents, as a relatively small company, would have had the manpower resources to handle an account as big as NIB’s.
Tribune Business revealed in 2012 the “grave concern” over plans to make A Scott Fitzgerald Insurance Brokers and Agents Ltd its general insurance ‘broker of record’, given that the company had not participated in the contract bidding process.
However, what was not exposed then, but has now been uncovered, is that NIB also granted the company the brokerage contract for its group health insurance business - a policy that would provide coverage for its near-600 employees.
There is nothing to suggest that Mr Fitzgerald or his family members have done anything wrong in relation to the NIB insurance contracts, and there is no evidence - unlike in the recent Baha Mar controversy - that the Minister sought to lobby for his mother’s company to get the business.
But letters obtained from an NIB employee, acting under condition of anonymity, emphasised that Family Guardian, not the national social security system, would absorb the costs associated with A Scott Fitzgerald Insurance Brokers and Agents’ commission.
A June 29, 2012, letter to then Family Guardian president Patricia Hermanns written by then NIB director, Algernon Cargill, said: “I enclose a copy of our letter to Allardyce Scott-Fitzgerald dated June 29, 2012, and write to formally confirm to your company that, effective immediately, A Scott Fitzgerald Insurance Brokers and Agents has been appointed as representative (broker of record) for NIB at the existing commission rate for NIB’s group insurance business that is currently placed with Bahama Health/Family Guardian under a contract that expires January 31, 2013.
“It is also understood that, as a result of this appointment, there is to be no increase in cost and/or decrease in the existing benefits offered under our group plans and, specifically, no direct cost to NIB.”
It is unclear whether A Scott Fitzgerald Insurance Brokers and Agents was replacing an existing ‘broker of record’, or whether the role was newly-created for it.
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