Bob Richards Responds: Insurance Premiums
[Updated] Shadow Finance Minister Bob Richards has responded to Premier Paula Cox saying that the OBA actually first raised this issue in the House of Assembly, while noting they “don’t care who takes credit for the idea” as part of their “approach to government will be to take on good ideas from whomever they originate.”
Premier Cox said she was “puzzled as to why the One Bermuda Alliance was attempting to showcase an original Government idea and programme which was already in place and pass off as one of their own.”
Mr Richards said: “I read with interest the Premier’s statement on Friday that the Opposition was “attempting to showcase an original Government” money-saving idea as our own – namely reducing by millions of dollars the amount of money the Bermuda Government pays each year for insurance.
“To back up her charge, the Premier cited comments she made on this issue in the House of Assembly “as far back as” March 16, 2012.
“Just for the record, the One Bermuda Alliance first raised this issue in the House of Assembly during the Budget debate on March 12, 2012, four days before the Premier made her remarks.
“The issue was raised by my colleague Cole Simons who noted that the Government had paid more than $25 million in premiums over the preceding three years – a figure he thought excessive and capable of being reduced dramatically.
“Cole proposed different ways this issue could be addressed and costs reduced. What’s the point? We don’t care who takes credit for the idea. Part of our approach to government will be to take on good ideas from whomever they originate. A good idea is a good idea.
“What’s more important is action on good ideas, and that’s why I raised the issue in the Friday press conference with OBA Leader Craig Cannonier. We have not seen or heard of any action on this matter and it’s important because of the millions that could be saved, and that is why I spoke about it Friday.
Mr Richards continued: “Now, when you look carefully at the Premier’s statement issued after the press conference, she deftly avoided saying anything about actual cost-saving actions taken since March.
“So, I would pose the following questions: Has the Government formed its own risk management agency? Has the Government decided to self-insure? Has it actually formed a captive to self-insure? These are questions that could readily answered one way or another.
“For the record, here is Mr. Simons’ statement as recorded in Hansard, the official transcript of the House of Assembly:
Mr. Nelson H. Cole Simons:
…On the insurance side, this is the one that caught my attention. Over the past three years, the Bermuda Government has spent in excess of $25 million in insurance premiums—$25 million. The question that I have is, Are we getting value for money? Who is managing this? Do we have an insurance officer? Do we have a risk manager that will work with Government, who specialises in insurance, managing insurance risk and getting value for money from the service provider?
An Hon. Member: Yes.
Mr. Nelson H. Cole Simons: I believe, quite frankly, the time is ripe for us to have a risk management branch within this area or within government. The mandate of this branch would be fourfold: They would basically be the central risk management agency with-in government; be the risk management advisor/consultant for this department and all government departments; they would provide risk management programmes, development and delivery; and they would also manage claims and litigation pertaining to insurance coverage or insurance occurrences or accidental injury. This branch, in its role as the risk management agency within government, will advise Government on risk management issues, review and approve indemnities given by Government and assist Ministries in establishing their own comprehensive risk management programmes.
So, again, this is a recommendation that we on the Opposition benches would recommend that the Government adopt.
Risk financing is another role of the risk management branch. The branch will purchase all insurance on behalf of the Ministry. The branch will cover the hospitals, they will cover schools, they will cover social programmes, they will cover TCD, they will cover all these programmes. Again, they will make rec-ommendations on whether there should be self-insurance at certain levels to insure efficiency. They will be able to look at our loss experiences to deter-mine whether we are getting true value for money or whether we should even consider having a captive and secure reinsurance on the captive and make that more efficient.
I think $25 million over three years is too much, and we need to see if we can find other op
tions, especially during these challenging economic times. You know, at the end of the day, this may be the only way we can go. But I see no evidence that we have examined any other avenues.
The other issue that I would like to just men-tion is the property asset management. As I said ear-lier, we have almost 800 properties. We should, by now, have a property asset management programme. The Minister indicated during his brief that they are currently putting together the property asset manage-ment programme. Mr. Chairman, I would have to say we have dropped the ball there.
The other issue is, have we had an appraisal done on these properties? How much are these properties worth in real terms? Because if we are going to have an asset management programme, surely we need to know what these assets are valued at. Again, this goes back to the risk management. This goes back to the insurance. When you go to buy insurance for a property the first thing the insurance company will say is get the property appraised. So again, if we are going to buy insurance, if we want to be more efficient about our insurance process, let us get these properties appraised and catalogued and see how these ongoing monetary—these ongoing appraisals will help reduce our insurance costs and also provide a means of protecting and enhancing and investing in the assets. When you build a house, when you buy a house, you invest in it. You do the ongoing maintenance to make sure that the value sustains itself or appreciates.
Update 10.54am: The PLP responded saying: “Bermuda deserves better than this back and forth. This isn’t about egos – this is about what is best for our country.
“The fact is that the Premier and the PLP did engage in the very kind of insurance premium cost savings that Mr. Richards highlighted in his statement. Perhaps he could be fair in his comments and at least acknowledge that.
“If Mr. Richards and the OBA really want to bring Bermuda together as you claim, it’s time to tone down the negativity and the cheap political point scoring. They know that the PLP’s heart is in the right place and that we love this country.
“All this negativity does nothing to create jobs and opportunities for our people. It’s time to rise above the pettiness.”
Yawn…..
Really Bob, you are grasping at straws. Everytime you say something it proves to be wrong.
Whether its the EEZ or this issue, people can tell they are all about hot air.
Also, if Cole said something on March 12, I’m sure gov didn’t issue an RFP and select a vendor to report to the house on March 16.
Bob, come up with something original that makes sense then maybe people will listen to you.
You didn’t the whole article did you. Typical blind PLP supporter.
Strange how IF the Governement put this out to RFP (which I can find no record of) in March there has still been NO action..
But then again LACK of action is what this government is al about. (unless it’s back paddling to fix a screwup)
Is it Bob’s fault or Paula’s that UNEMPLOYMENT in Bermuda has gone up by 330% since 2000? (PLP came to power in Dec. 1998)
So where’s the answer hey? What was the result of the report? No answers
Bob the builder disappeared with McCain – Bob the snob will disappear soon. We won’t have to listen to his bull$hit much longer. Praise the Lord. I’m not PLP but can’t stand this pompous $ss.
Pong! the ball is now in your court Bob,.Great responce, you’re leading!…it would be prudent to assess your property once you take ownership, many of us knew that once a new party came into power they should take inventory of their assets before giving it away!lets hope the next government will take heed of previous neglects..Go BoB!
bob is never on the money.
@lmao–Bob is always on the money, its part of his regular job, he does financing..duh..just call a spade a spade if you can possibly be unbiased..
This will be an interesting ‘tit for tat’.
One question based on substance is which company received the insurance premiums and what was the profit on the portfolio over the past 14 years (1998 to 2012).
Similarly who received the premiums and what was the profit for the 14 years before that ((1984 to 1998).
Readers might be interested to know these details since we often hear questions about ‘the money’.
“But, Mr. Chairman, in order to reduce Government’s insurance costs, the Government sought proposals from qualified insurance professionals for the review of, and advice on, the structure of all its insurance programmes. An RFP was sent out seeking a suitably experienced and qualified team to lead in the request for the insurance review and advice, and a successful service provider has been selected.”
To repeat the last line…’ and a successful service provider has been selected’
Unless everyone became super efficient during the 4 days between March 12, 2012 and March 16, 2012, it is clear that the government acted before MP Cole Simons’ comments.
To be frank, this is a distraction for everyone.
It would have been good if the annual $13m premium had been paid into a fund for the 14 years since 1998 (and before) since the fund would have at least $150m now, allowing for any minor claims and inflation.
To both the Premier and MP Richards, let’s end this ping pong match. It is clear that both parties had the same idea and the PLP acted on the idea before any comment by MP Simons during the budget debate.
Talking of Insurance…Who insures the GP cars and W&E trucks?
The question came to mind when I saw the nice new White Jeep double parked outside Butterfield Bank this morning.. dropping off his wife (of girlfriend).. Windows closed and Aircon on..
Wish I had a free ride to work ever day!!!
White W&E Jeep
Dear PLP:
Can you please tell us where you have gotten in the process instead of deflecting?
The Premier stated on the weekend that the progress made to this end has been “demonstrable”. That should make it fairly easy to demonstrate how hard you have been working to implement some cost savings in this area.
Thank you
“All this negativity does nothing to create jobs and opportunities for our people. It’s time to rise above the pettiness”….need we remind you that YOU are the party in power? So if you wish to get on with the business of moving Bermuda forward, then MOVE ON WITH IT! You can’t claim there is too much pettiness when there is pettiness on both sides…the difference being that the opposition has not been in a position to do anything for 14 years….YOU have, so GET ON WITH IT!
Dear UBP,
OK, so during your 30 years all insurance premiums were paid to Colonial, Argus and BF&M all local companies which employ local people and are in the business of making profit.
So if we stop giving these local companies business how will it affect their bottom line (i.e. revenues) and also their ability to employ the many Bermudians who are employed in these domestic insurers?
Me thinks Brother Bob tryeth too hard to maintain relvance, his Dad was made Premier when the Social Architech (aka Sir Henry) realised you needed to change the face of leadership, surely Bro Bob doesnt think the voters buy this routine of him and Craig actually being in chrage of the OBA?
How long will it be before the b___ members of the OBA who are pretending to have autonomy resign and come and joing up with the PLP so they can make real decisions in their home, Bermuda.
UBP is dead, time to bury it once and for all.
“How long will it be before the b___ members of the OBA who are pretending to have autonomy resign”…. dude, it’s 2012. No black (or white) person wants to join the racist PLP regime. Us young people don’t have your delusions. We want change… and quick before ALL the jobs are gone.
First of all it is not the government or political parties who drive the economy or business, it is the private sector, the entrepreneurs and risk takers who create jobs, spend large amounts and generate the flow of money. The government clogs the system, bureaucratizes the pathways to expansion and shows their ineptitude by draining the economy, driving out business and plunging the country into the worst debtload of its 403 year history.
The small minded, non risk takers who shine as armchair politicians but never shoulder the responsibility of staffing a business turn up on this site to prove this by condemning people like Bob Richards who at least strives to create an environment in which business will not only survive but have a chance to prosper.Only then will you see jobs return. Under the PLP you will have absolutely no hope..none, and I dare you to vote for them again unless you truly enjoy being twinned with a third world small town.
This is becoming ridiculous. I constantly hear the OBA has no ideas yet they raise a topic and are shut down immediately as taking ideas from the PLP. The OBA responds that it was their idea first? The Premier says no it was ours?
Really? Why not just show documentation on this GREAT IDEA being acted on? I don’t care who came up with it first. What seems “puzzling” to me is we get an immediate response to Bob Richards attempt to “showcase an original PLP idea”, but when statistics stating “dramatic increase in incomes” we get Dawn Simmons bringing us the great news? While Mrs. Simmons is a candidate for the next election, would it not seem more accurate when an actual sitting Minister confirms the reports?
I constantly hear of all this “spin talk” that is taking place but personally, it is insulting when I feel deceived into believing anything that has been presented to sugar coat factual short coming with this Government. As from previous, post I am NOT a party supporter be it UBP, OBA or PLP and am actively engaged in formatting an opinion as to who I will vote for. The same as I did in 1998 when I chose PLP as the party Bermuda needed at that time.
Who cares how much insurance costs, just borrow more money to pay for it! The private sector are the ones that get taxed the most anyway, and they are all rich people according to the PLP so they deserve to be crippled by the debt for working hard and having jobs.
“Update 10.54am: The PLP responded saying: “Bermuda deserves better than this back and forth. This isn’t about egos – this is about what is best for our country.”
So Premier Cox was out of line to respond to Mr. Richards’ comments in the first place? Got it. It’s only back and forth when the Government is being criticized.
“The fact is that the Premier and the PLP did engage in the very kind of insurance premium cost savings that Mr. Richards highlighted in his statement. Perhaps he could be fair in his comments and at least acknowledge that.”
He might have been, except that unti he raised the issue, and even afterwards, there’s no evidence that this Government has done anything! Premier Cox asserts, without proof, that things have been done. An RFP was issued in March? Where’s the outcome of that?
“If Mr. Richards and the OBA really want to bring Bermuda together as you claim, it’s time to tone down the negativity and the cheap political point scoring. They know that the PLP’s heart is in the right place and that we love this country.”
Having your heart in the right place doesn’t excuse incompetence. Given the Island’s debt, the condition of its infrastructure, the fraying of its social and economic fabric, I doubt very much Bermuda can stand much more of the Government’s heart being in the right place.
“All this negativity does nothing to create jobs and opportunities for our people. It’s time to rise above the pettiness.”
Indeed. It’s time to call the election. Let the people decide.
EW
Madame Cox quoted herself in the previous article (October 19th) “But, Mr. Chairman, in order to reduce Government’s insurance costs, the Government sought proposals from qualified insurance professionals for the review of, and advice on, the structure of all its insurance programmes. An RFP was sent out seeking a suitably experienced and qualified team to lead in the request for the insurance review and advice, and a successful service provider has been selected.’”
I went back and re-read this several times to be sure I understood exactly what was said. The RFP was seeking a team to “lead in the request for the insurance REVIEW…and a successful service provider has been selected”.
This statement is ambiguous and can be read as a provider has been selected to lead the review and to give advice, or that a review was held and, based on the results of the review, an insurance provider was selected.
I would ask that there be some clarification here. Madame Cox stated clearly that the Government does not self-insure. OK, but has the review actually been completed? What were the results of the review? Was the Government advised to self-insure? Where there other cost-cutting suggestions made? Have they been implemented? Inquiring minds want to know. The people of this island have a right to know.
I would like to believe that the process did not stall with the setting up of a review board that has never completed its remit, but which we have been paying for since March, on top of the cost of high rates of insurance, because no changes have been made.
Please tell me it ain’t so!