Protection needed for businesses and jobs under insurance policies
ON FEBRUARY 13, 2018, Prime Minister Andrew Holness used the Jamaica Labour Party (JLP) majority in Parliament to defeat the Banking Services Amendment Bill I tabled in the Parliament, which would prevent deposit-taking institutions, such as banks, from charging unreasonable fees. These are fees charged by the banks against account holders and persons encashing cheques, etc. The affected persons are ordinary working people, micro, small and large business operators who hold accounts at the banks, or just doing everyday transactions with these entities. These persons include pensioners, wage earners, middle-class workers, young professionals, among others.
The economic fallout from the current coronavirus disease 2019 (COVID-19) pandemic has already begun to heap hardship on individuals, small, medium and even some large businesses. For the unemployed, underemployed and marginal income earners, the hardship is already very tough.
The one-off COVID-19 care assistance by the Government, though limited and welcomed, is no meaningful respite for the majority of affected persons. Amid the current COVID-19 pandemic, some banks have announced the waiving of a few fees that the bill would have halted. These actions by the banks are being deemed “humanitarian gestures” that some like Prime Minister Holness, Finance Minister Nigel Clarke, et al, have applauded. Not me.
Had Prime Minister Holness and his Government members not blocked the Banking Fee Bill, and continue to do so, thousands of Jamaicans would be allowed to keep their own money to help themselves now, rather than relying on government assistance alone to survive.
THEIR ESSENTIAL PURPOSE
Holness and Clarke, during the 20202021 Budget Debate, while offering COVID-19 economic stimulus package from the public purse, praised the banks for foregoing $3.0 billion of asset taxes as part of the Government’s $25-billion support package. What both were careful not to do was to include and insist that insurance companies honour business interruption loss provisions existing in many property insurance policies in Jamaica and elsewhere in the world.
These existing policies provide coverage against pandemics, like COVID-19. These insurance provisions were intended to protect businesses from financial losses that can cripple their operations and undermine their ability to pay workers, settle other financial obligations, and keep the economy going. This is essentially what insurance policies are for, providing financial coverage against losses that can occur from no fault of the insured.
The Government’s COVID-19 pandemic support of $25 billion from the taxpayers themselves is a modest amount compared to the over $50 billion in fees annually deducted from ordinary, working Jamaicans’ accounts by the banks, with the support of PM Holness and fellow JLP government members of parliament who have continued to suppress the Banking Fee Bill.
Indeed, the amounts to be settled under these insurance policies can be substantial. But that is why premiums are charged, and policies are offered and purchased. It is also among the reasons insurance companies have reinsurance policies themselves, which are generally offshore, as in the case of Jamaica.
In many State assemblies in the United States, such as New Jersey, Massachusetts, Ohio and Oklahoma, steps are being taken to insist that insurance companies honour these provisions.
In the case of Oklahoma, it is reported that the Chicksaw State Native American tribe and casino owners have filed a suit against certain Lloyd’s of London underwriters, including part of AIG and AXA XL. These reinsurers are among the largest in the world. The tribe is asking the court to declare that the financial losses of shutting down its casinos during the coronavirus pandemic should be covered under its insurance policy.
STAND WITH ME
I am urging Prime Minister Holness to not again abandon the majority of Jamaicans amid the current COVID-19 pandemic, as he did with the Banking Fee Bill, and immediately act to have the insurance companies honour these policy provisions. Helping to save some of our businesses is helping to save jobs and our economy that we all have sacrificed so much to rescue during 2013 to 2016 after its virtual collapse coming out of the 200810 recession. It is this rescued economy that is now offering some capacity to overcome the current challenges. The Government must act to protect it, and act NOW, though a little late.
It would be most prudent of the prime minister to instruct the attorney general to immediately assess our general insurance legislation, along with the Financial Services Commission, to ensure adherence to the existing provisions that can protect our businesses, employees and our economy.
Should the Government fail to act in this regard within short order, I will table a Private Member Bill to protect our people and businesses so affected. However, in a spirit of bipartisanship and nation building, I would welcome one of my colleagues on the government side to join me in the sponsorship of this bill. I do hope that when this bill is tabled, it will not suffer the same fate as the Banking Fee Bill, because the prime minister and fellow JLP members of parliament again would have failed to demonstrate the courage to stand up for ordinary Jamaicans in their most desperate and vulnerable moment.
Failing to do this would, instead, be acting to protect those best able to protect themselves. I hope that good conscience will prevail this time around.