De Couto On Tax, Insurance Companies, More
The OBA’s Reply to the Budget “proposed regulating local insurance companies, including premium and rate changes,” Shadow Finance Minister Dr. Douglas De Couto said, adding that “regulation of local insurers must include whether they can own and operate medical practices and pharmacies, and how they control customer choice for prescriptions.”
Dr. De Couto said, “Recent news that the Allshores insurance company made a $21 million gain from tax credits will shock most Bermudians, as they struggle with the cost of living, including insurance costs that go up and up every year. The One Bermuda Alliance firmly believes that these tax credit benefits must flow straight through to the Bermudians who pay the insurance premiums.
“That’s why the OBA’s Reply to the Budget proposed regulating local insurance companies, including premium and rate changes. Bermudians have seen their insurance costs go up and up each year, with no transparency or accountability for the changes. A regulator such as the BMA should review proposed local insurers’ rate changes to make sure that any changes are justified and fair to consumers. This approach is widespread in the United States and other jurisdictions, where home and auto insurers must have rate filings approved before they can make changes.
“It’s true that regulating insurance rates doesn’t always mean premiums will go down. The underlying costs for insurers for operations and reinsurance may be rising. But, Bermudians could at least feel confident they were being treated fairly. This is even more important given the dominant market position of Allshores. Our single electrical utility, Belco, is regulated due to its critical role for Bermudians and the island, shouldn’t local insurers be as well?
“Regulation of local insurers must include whether they can own and operate medical practices and pharmacies, and how they control customer choice for prescriptions. Some of these initiatives by insurers are intended to reduce costs, but it’s also easy to see how they can be abused to increase company profits at the expense of Bermudian policyholders. A trusted regulator such as the BMA can make sure that policyholders’ interests come first.
“The One Bermuda Alliance would also convert the 3.5% Financial Services Tax on insurance premiums to a sliding scale, to provide targeted relief for those who would benefit from it the most.
“While Government officials travel the world for digital finance, and block real reforms like the Absentee Voting bill brought to Parliament by the OBA, we will continue to push for solutions that help Bermudians today that were in our Budget Reply. Solutions like school breakfasts to help families that are stretched, and immediately cancelling the failed PLP sugar tax to reduce food prices, among many others. Government must act now, and if that means stealing the Opposition’s ideas, we’re all for it.”
