By KHRISNA RUSSELL
Deputy Chief Reporter
THE government's policy from the Caribbean Catastrophic Risk Insurance Facility will this year cost taxpayers $3.4m.
Finance Minister Peter Turnquest made the announcement yesterday as he told MPs the government also plans to establish a disaster relief fund to assist with future rebuilding requirements in the wake of natural disasters.
This follows the minister's announcement last month that government successfully renegotiated the catastrophic risk insurance coverage with the agreement the new policy would divide The Bahamas into three district zones.
This new set-up would structure payouts based on this arrangement, Mr Turnquest said last month.
"It will be recalled that the previous administration irresponsibly cancelled our county's coverage under the CCRIF and, as a result, deprived us of a significant payout in the wake of Hurricane Matthew," the minister said as he led the budget debate yesterday.
"At our request, CCRIF has provided new coverage for government infrastructure based on three island segments in order to cater to our unique archipelagic needs.
"They will also provide us with excess rainfall coverage. This insurance coverage will cost the government a total of some $3.4m in 2018-19. In addition, we plan to establish a disaster relief fund during this term, to which we will make annual contributions of sufficient size to build up a fund to assist with future rebuilding requirements in the wake of natural disasters."
Last September, Mr Turnquest revealed the Minnis administration was working to amend the status of the country's policy agreement with CCRIF, first signalling that a similar move to the one he announced yesterday could yield The Bahamas its best value.
At the time of the suggestion, The Bahamas was due to receive a $234,000 Hurricane Irma-related payout from CCRIF, which reflected less than one per cent of the total Irma-related payouts the CCRIF had made in the region.
Moreover, the payment represented a fraction of the multi-million dollar relief fund needed in the southern islands at the time.
The former Christie administration said it withdrew from the CCRIF "after careful consideration" and advice from several government agencies.
Just months before Mr Turnquest's comments, Official Opposition Leader Philip "Brave" Davis announced that the move was made after the country was denied a claim after the passage of Hurricane Joaquin in 2015.
A committee was formed, he said, consisting of technical officers in the Ministry of Finance, the Department of Meteorology and the Port Department, which found that it was "ineffective to continue with insurance" from the CCRIF and said "it would be more cost-effective if the government self-insured."
At the time, Mr Davis said the committee found that "premiums paid to CCRIF would've been better placed into an account to aid with hurricane disaster relief."