Caribbean Insurance Cooperative Gaining Members
by Mike Godfrey, Lowtax.net, Washington
29 April, 2014
The fiscal cost to Caribbean territories of insuring themselves against natural disasters will fall further still if Latin American nations join the Caribbean Catastrophe Risk Insurance Facility, as proposed.
The CCRIF aims to provide affordable insurance against natural disasters, which can otherwise have devastating economic and fiscal effects, especially for smaller territories, such as those in the Caribbean.
The CCRIF's size has allowed it to provide insurance on much more favorable terms than would have been possible for the individual member countries, realizing savings of about 50 per cent. The expansion of the initiative could be positive for local insurance and reinsurance companies. For members, the fund provides members and investors in those territories with certainty that a natural disaster would not trigger a fiscal crisis. At the recent meeting, local governments discussed progress under the initiative, and agreed that it had been vital to ensuring that the cost of recovering from natural disasters is manageable.
A number of Central American countries are now considering joining CCRIF including Panama, Costa Rica, Guatemala, and El Salvador.
World Bank Vice President for Latin America and the Caribbean Hasan Tuluy highlighted that the CCRIF is an example of a public good where collective action has clear financial benefits.
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