Column: Dr De Couto On Insurance, Tax, More
[Opinion column written by Dr Douglas De Couto]
Recent news that the Allshores insurance company will spend up to $20m buy back shares is a glaring reminder of the PLP Government’s negligence towards Bermudians’ insurance costs.
Allshores will receive a $20.8m tax credit benefit that will be paid for by Bermudian taxpayers, due to OECD rules about Tax Credits. Instead of using this credit to lower customer insurance premiums, Allshores is giving it to their shareholders with this share buy-back, providing a 21% gain over the recent Allshores share price on the BSX – that’s a sweet deal.
But don’t blame Allshores for benefiting their shareholders, that’s how companies work. Blame Government for failing to act and put in place the right guardrails. Government and many others have known for a while that Allshores would get this Tax Credit, and that’s why the One Bermuda Alliance repeats its call for more regulation for local insurers.
Like jurisdictions such as the United States, and yes, Cayman, Bermuda ought to regulate how local insurers set rates and create relationships with pharmacies and medical providers. Regulation to ensure that customers are treated fairly and receive the benefits of any taxpayer-funded Tax Credits, especially for firms that dominate the market. This is like the Regulatory Authority (RA) monitors electricity rates so that BELCO does not mint money on the back of Bermudian customers.
Why hasn’t Government done the obvious and right thing here? The OBA has long called for the roles of Premier and Finance Minister to be separated, given the importance and complexity of each role in today’s modern world. Each job requires a Minister’s full-time attention. Is the Premier and Finance Minister too busy or overwhelmed? Is that why he has overlooked this glaring loophole in how the Tax Credits work? Given the burden of insurance costs on Bermudians, that’s negligence.
Whatever the reason, it is clear that the lame duck Premier is not giving either of his jobs the full attention required, especially given his busy schedule of travel and personal celebrations. The question is, why aren’t his Cabinet holding him accountable? Under the principle of collective responsibility, his failures are theirs, and theirs are his. Indeed, why aren’t the rest of the PLP MPs, and the whole of the Progressive Labour Party holding the Premier and Cabinet accountable?
Cabinet output is so low that legislation is being stretched out and carried over in Parliament just to fill the days. Meanwhile, Bermuda is experiencing multiple crises: healthcare, education, cost of living, roads and infrastructure, and violence. Bermuda deserves a Government that is working hard for them, not just treading water to fill the days.
And one place to start is to close this loophole: regulate local insurers.
- Dr Douglas De Couto, Shadow Finance Minister
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If this is such a big issue how come the opposition is only raising it now and with out any details? What is the origin of this rebate? How could it have been avoided? What exactly is the OECD role? Vague accusations doesn’t help anyone. What are they recommending to address this issue?