Pay up!

MALVERN, St Elizabeth — Prime Minister Dr Andrew Holness on Thursday urged private insurers to pay up Hurricane Melissa-related claims, insisting this is critical to national recovery. He juxtaposed their performance with that of the National Housing Trust (NHT) which he said has paid out billions to just under 4,000 mortgagors who submitted claims for property damaged.

Holness’s comments came against the backdrop of concerns expressed by individuals and members of the business community about the snail’s pace of insurance payouts seven months after the Category 5 storm battered sections of the country.

“I believe that they should pay you very quickly. Paying up the insurance is critical to the national recovery. I want to commend the NHT for being quick in making the insurance payments, and I want to challenge the private insurers to speed up the payments on the claims. That is an important part of the recovery from Hurricane Melissa,” the prime minister said during the NHT’s handing-over ceremony for 27 service lots in Malvern, St Elizabeth.

“The NHT has processed so far 3,835 insurance claims totalling $7 billion in claims. Of course… there is a deductible excess, so even though the claim is for $7 billion, there is a part of it that the insured will have to stand, so you [NHT] will end up paying about $6 billion or somewhere in that region,” Holness explained.

The NHT, however, has also had its fair share of criticism from some mortgagors who are still waiting for word on when their claims will be honoured.

Holness said the process is ongoing.

“The NHT has paid, out of that claim, $2.85 billion; that is what it has paid out. Now they don’t make the payment all at once. The payment is staged, so effectively they have paid out almost half of the insurance claims,” he said.

“I think this is a point that we should pause at, because the NHT is a very good example of an entity acting swiftly. Insurance claims aren’t processed that quickly, but the NHT has done a very good job. I want to point that out to the country and to challenge the private insurers for which claims have been made on them, and for which I have had many letters. People [are] writing to me to say, ‘You know, my insurers they have come, they have assessed, but I can’t hear anything, nothing has been paid to me yet. I am still in the negotiation,’” added Holness.

In a May interview with the Business Observer, president of the Montego Bay Chamber of Commerce & Industry Jason Russell spoke of the impact this delay is having on enterprises. Slow settlements, he noted, can directly affect whether companies are able to retain staff, pay suppliers, and reopen operations after a disaster.

“We’re talking about the life and death of a business. A business can’t wait a year to get paid,” Russell said then.

In a letter to the editor published in Wednesday’s edition of the Jamaica Observer, managing director of Bluefields Bay Villas & Suites in Westmoreland Andrew Houston Moncure outlined the challenges faced by his family in their property insurance claim, saying they have been met with “silence” since last November.

“That silence is being administered, in our case, by a loss adjuster acting as agent for the insurance company. This is not a complaint about the speed of complex hurricane claims. We understand that Melissa created an unprecedented backlog. Westmoreland alone lost thousands of structures. Adjusters are stretched thin. We are not asking for miracles; we are asking the people who are paid to process our claim to communicate with us about it on a predictable cadence,” the letter read, in part.

Houston Moncure pointed out that his family’s small business has rendered assistance to its community over the past seven months through efforts including delivering building supplies and providing labour.

“We did this without waiting for a cheque. We did this because if you own a business in a Jamaican coastal community you do not get to wait. The community is the business; the business is the community. When the storm hits you show up,” Houston Moncure wrote.

“It is, therefore, difficult to watch a regulated financial institution — one that has banked our premiums for more than 30 years — fail to meet that same basic standard for its own customers. The legal obligation is not vague. Regulation 135 of the Insurance Regulations requires Jamaican insurers to settle valid claims within 30 days of the conditions for payment being met, with statutory interest running thereafter. The Financial Services Commission’s (FSC) Market Conduct Rules, Version 2.0, in force since 2022, require insurers and their intermediaries to settle claims ‘fairly’ and ‘without undue delay’, using ‘transparent and effective claims procedures’,” the businessman added.

Speaking during a panel discussion at the Insurance Association of Jamaica’s business conference in May, BCIC CEO Peter Levy described the industry’s delayed response as a “significant failure”.

However, he acknowledged that insurers faced major logistical and operational constraints in the aftermath of the storm. He recalled that roads were blocked, communication systems were down, and even contractors preparing estimates were dealing with storm damage themselves.

“There was not enough resources to handle the volume,” Levy said during the panel discussion, adding that the industry now has to examine where systems failed and what changes are needed before another catastrophe strikes.

Among the areas now under review are whether insurers should ease some verification requirements during major catastrophes, and whether claims can be processed faster once losses fall within a reasonable range of assessment.