The need for state works to be insured was raised during a meeting held on Monday between the Insurance Superintendence and the Dominican Chamber of Insurers and Reinsurers (Cadoar).
The central argument for the suggestion was that “it costs us all” to finance the repair of State assets that are lost due to catastrophic events such as hurricanes, storms and earthquakes.
The meeting was convened by the Superintendent of Insurance, Josefa Castillo on September 20, 2022, at 11 a.m. in the conference room of said entity.
The purpose of the meeting, according to a source of full credit, was “to discuss the details of the steps that insurers are taking to serve their respective clients for the damage caused by Hurricane Fiona on Monday the 19th of the current month.
During the meeting, the insurers stated that the member companies of Cadoar have activated their contingency plan in the face of situations like these in order to offer their clients and insured their assistance via their collaborators and adjusters who will evaluate the damage caused by the atmospheric phenomenon.
They also expressed that the insurance sector is prepared and ready to help recover damaged assets and restore the productive capacity of affected policyholders.
They emphasized that “the insurance sector has the financial strength to deal with the losses suffered by its policyholders together with its international reinsurers, as we have done on previous occasions.”
It was then that they exposed “the need for state works to be insured since it costs all of us to repair them.” It was stated that bridges and highways are the road infrastructures that suffer the most damage from natural phenomena.
Yesterday this newspaper published a note in which it highlighted that due to lack of insurance for its infrastructure, the Dominican State disbursed the equivalent of some US$5.1 billion to cover uninsured damages and losses caused by hurricanes and storms David, Federico, Olga, Noel , Jeanne and Georges, which affected the country between 1979 and 2007. The losses assumed by the State represented between 0.6% and 118.4% of the gross domestic product (GDP) of the year in which the phenomenon occurred and the corresponding disbursements were made.
During the meeting, the partners of Cadoar also exposed the importance that “businessmen have their sums insured up to date in the face of prevailing inflation in order to avoid the application of penalties such as underinsurance.”
In addition, aspects related to material damage that can be repaired in a short time and the reduction and interruption of business were discussed.
Likewise, they asked the Insurance Superintendency for authorization to use the catastrophic reserves and the liberalization in the use of reserve investments.
The subject of the deductible in items according to contracts
Regarding the application of the deductible in the items according to the contracts between the insurers and the insured, the representatives of the Dominican Association of Insurance Brokers (Adocose) promised to take steps to explain to the clients the operation of said deductible and Under what circumstances does it apply? It was also informed in a preliminary way of the damages caused and therefore a reduction in compensation for business interruption that will also affect other branches, such as automobiles.
Other topics discussed were the use of the investment of the reserves for payments of indemnities to the insured until the funds are received from the reinsurers.
