As many of you may know the entire Caribbean region is vulnerable to natural disasters, especially hurricanes.[1]
Barbados itself has not felt the full brunt of a hurricane in several years. However the housing stock of the country, especially that comprising chattel houses does suffer when the high winds and heavy rains from weather systems brush this country.
In these circumstances the Government is usually called upon by the public to provide support to families that have suffered loss or damage to their homes. In order to address this matter in a more efficient and transparent fashion the Owen Arthur piloted through Parliament legislation for the establishment of a Catastrophe Fund.
Purpose of the Fund
According to the insurance industry, the susceptibility of the region to catastrophes contributes to relatively high re-insurance premiums that are then passed on to consumers. The purpose of the Fund is to provide financial assistance to low income earners who own and occupy chattel houses. In setting up this Catastrophe Fund there are some individuals that might question the propriety of this initiative. Questions might be raised as to whether individuals should not have the responsibility of insuring their own premises.
The truth is that in the aftermath of a disaster the public as a whole does not wish to enquire into the circumstances of the victims and rather expresses the view that Government should take substantial responsibility for reinstating the homes of Barbadian families. In addition some of the houses that will fall under the purview of this new legislation are not considered to be insurable by insurance companies in Barbados. Finally sometimes individuals live in circumstances that the payment of insurance premiums might in fact, be a luxury.
Criteria for Assistance
The provision of this assistance is however circumscribed by certain criteria:
1. There must have been a catastrophe and that catastrophe could have been caused by fire, earthquake, storm, hurricane, flooding, a storm or sea surge, lightning, or by some other force of nature.
2. The house must have been damaged or destroyed by a catastrophe and must be valued at under $125, 000.
3. The recipient must earn less that $22,500 annually.
4. The individual must both own and occupy the house.
5. The house must be a chattel house, which means a house where 75% or more of that house is made of wood.
It should be noted however that agencies through which Government usually provides assistance will remain operational so that assistance can be provided in deserving cases where the criteria can not be fully met. For example a pensioner that owns a house valued in excess of $125, 000 but the level of his income and family assistance does not allow him to effect the necessary repairs.
The Fund
For a period of five years a sum of $2.5 million will be voted by the Parliament. In addition, monthly contributions will be made through the National Insurance Scheme. The contribution is 0.1% of the earnings of both employed and self employed people. It will also consist of amounts realised by investment proceeds and proceeds from the operation of the fund. The National Insurance Office will be responsible for the management and investment of the fund.
The Committee
The legislation also proposes a committee that is responsible for the consideration, the assessment of claims and the issue of grants. The members are:
All of this is subject to the appropriate governance principles including proper accounting, auditing and reporting requirements.
[1] While we have done our best to ensure accuracy , it is always best to refer to the specific piece of legislation.
Barbados itself has not felt the full brunt of a hurricane in several years. However the housing stock of the country, especially that comprising chattel houses does suffer when the high winds and heavy rains from weather systems brush this country.
In these circumstances the Government is usually called upon by the public to provide support to families that have suffered loss or damage to their homes. In order to address this matter in a more efficient and transparent fashion the Owen Arthur piloted through Parliament legislation for the establishment of a Catastrophe Fund.
Purpose of the Fund
According to the insurance industry, the susceptibility of the region to catastrophes contributes to relatively high re-insurance premiums that are then passed on to consumers. The purpose of the Fund is to provide financial assistance to low income earners who own and occupy chattel houses. In setting up this Catastrophe Fund there are some individuals that might question the propriety of this initiative. Questions might be raised as to whether individuals should not have the responsibility of insuring their own premises.
The truth is that in the aftermath of a disaster the public as a whole does not wish to enquire into the circumstances of the victims and rather expresses the view that Government should take substantial responsibility for reinstating the homes of Barbadian families. In addition some of the houses that will fall under the purview of this new legislation are not considered to be insurable by insurance companies in Barbados. Finally sometimes individuals live in circumstances that the payment of insurance premiums might in fact, be a luxury.
Criteria for Assistance
The provision of this assistance is however circumscribed by certain criteria:
1. There must have been a catastrophe and that catastrophe could have been caused by fire, earthquake, storm, hurricane, flooding, a storm or sea surge, lightning, or by some other force of nature.
2. The house must have been damaged or destroyed by a catastrophe and must be valued at under $125, 000.
3. The recipient must earn less that $22,500 annually.
4. The individual must both own and occupy the house.
5. The house must be a chattel house, which means a house where 75% or more of that house is made of wood.
It should be noted however that agencies through which Government usually provides assistance will remain operational so that assistance can be provided in deserving cases where the criteria can not be fully met. For example a pensioner that owns a house valued in excess of $125, 000 but the level of his income and family assistance does not allow him to effect the necessary repairs.
The Fund
For a period of five years a sum of $2.5 million will be voted by the Parliament. In addition, monthly contributions will be made through the National Insurance Scheme. The contribution is 0.1% of the earnings of both employed and self employed people. It will also consist of amounts realised by investment proceeds and proceeds from the operation of the fund. The National Insurance Office will be responsible for the management and investment of the fund.
The Committee
The legislation also proposes a committee that is responsible for the consideration, the assessment of claims and the issue of grants. The members are:
The Supervisor of Insurance
The Director of National Insurance
The Chief Fire Officer
The Accountant General
Two other persons appointed by the Minister of Finance
All of this is subject to the appropriate governance principles including proper accounting, auditing and reporting requirements.
[1] While we have done our best to ensure accuracy , it is always best to refer to the specific piece of legislation.
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