CINICO faces review as CIG pours in cash

| 15/11/2018 | 30 Comments
CINICO, Cayman News Service

CINICO office in George Town, Grand Cayman

(CNS): The finance minister has said the Cayman Islands National Insurance Company (CINICO) is undergoing a review to see if it is fit for purpose. Roy McTaggart told his colleagues in the Legislative Assembly on Wednesday that the government-owned insurance company was under strategic analysis to arrive at some recommendations for government about its future.

As he revealed that government had to pour an additional CI$4.53 million into CINICO to cover the prescribed capital requirement in order to maintain its CIMA insurance licence and stay in business, McTaggart said it was exceeding its operating costs, so had fallen below the minimal capital needed to cover its risks and stay compliant with the law. 

As he pointed to the financial challenges CINICO faces, the minister was asked by the opposition member for BTW, Chris Saunders, why, when the private insurance sector had reaped profits in excess of CI$100 million in the last four years, government continued to subsidise that private sector profit by allowing the industry to cherry pick customers, while the government company picked up the slack.

“When is government going to deal with this, as every year the private sector makes a ton of profit and government has to take the losses?” Saunders asked.

McTaggart said that the ministry, in conjunction with CINICO, was seeking to understand the company, its operations and if what they do continues to be fit for purpose. The aim of the review is to then make recommendations about the company’s future. 

He had explained to the LA that the additional funds that had been transferred for this fiscal year, after approval by Cabinet, to prevent the insurance company from losing its licence had not undermined the Public Management and Finance Law, as the money was reallocated from other areas of his ministry.

But McTaggart emphasised the importance of pouring in more cash to CINICO, which he said was struggling to manage its costs on the current premiums it collects, largely from civil servants. CINICO covers more than 15,000 people, including civil servants, the indigent and those who cannot get cover from the private sector, and if government had not plugged its capital cash gap then those people could have been left without cover.

The government-owned insurance company hit the headlines recently after the chief executive officer, Lonnie Tibbetts, was fired. However, management problems are not the only challenges it faces, given that it is responsible for the health insurance of Cayman’s poorest, oldest and sickest people, in addition o civil servants.

Nevertheless, there have been hints from the premier and the health minister that the current mixed system is not working and government is seeking an alternative approach to health cover. So far falling short of suggesting CINICO could become a full national health insurer for all, the idea of opening up the publicly-owned entity to more people currently paying for cover in the private sector has been voiced on a number of occasions.

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Category: Government Finance, Health, Health Insurance, Politics

Comments (30)

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  1. Anonymous says:

    Here is a suggestion.
    Put Mr. Gilbert McLean in charge of CINICO
    I’m sure he can do a better job than the previous person.
    Plus he can know for sure if the original idea can still work or not.
    This idea does not mean that he would accept it. But just throwing that out there.

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  2. Keeping it real says:

    Cinico going broke because 5000 civil servants don’t pay into it like the rest of us. Keep going this way (medical and pension fully paid) and things will collapse as it is not sustainable.
    Too bad the ostrich’s have their heads in the sand and hope the problems go away!!!

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    • Anonymous says:

      Keep it real aka real fake news

      There are no way near 5000 civil servants who have access to CINiCO.

      The 3000+ civil servants who have access to CINiCO are healthy and are not the reason for CINiCO high budget.

      The poor, indegent and seafarers are the group that have cost CINiCO budget to increase.

      Oh dont forget all of the private sector workers whose employers refuse to provide post retirement health care coverage. Who do you think covers those poor people.

      Typical private sector. Making poor decisions that drive up the cost of Government and then complain of the cost.

      Get some real facts next time

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      • Anonymous says:

        Expatriate families of expatriate civil servants get their health insurance coverage where? Remind me how much they pay for it?

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      • sickof spongers says:

        12.13am
        If all these civil servants are so healthy why do they take so much sick leave?. You live in a world of make believe.
        All the seamen and vets (and there are lots of them), plus most of the indigent are all Caymanians.
        As for civil servants who do not pay anything, have you looked at the terms of their platinum plated coverage as compared to what is offered under the SHIC which is all the poor people get plus those who pay Cinico premiums.The difference is like comparing the salary of a barmaid to that of Mr Manderson.
        As for the private sector they all pay premiums, co-pay and excess, plus every policyholder contributes $10 a month for Cinico’s coverage of the indigent.A civil servant is totally ignorant of what this involves as none of it applies to him.
        Leave your dreamworld and admit what your own Government has already told you, that all your free medical care is unsustainable and this is what is driving up Government costs.

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    • Anonymous says:

      It’s paid as part of our full remuneration. Same way yours is except we cut out the middle-bank. CIG can’t pay cash to compete with private sector pay to attract good staff to low-income careers instead of having all the best staff become consultants so makes up the difference with health insurance you only wish you had. Stop letting your envy roil your stomach.

      • anonymous says:

        6.06pm Ignorance is bliss, you have no idea what it costs a private sector employee to cover all medical expenses for his family. Add this to civil service salaries and you are vastly overpaid for your inefficiency some of which is due to the custom of running your personal businesses on Government time.

  3. Anonymous says:

    knew it was only a matter of time…

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  4. Anonymous says:

    Good ol’ Cinico, another Ezzard screw up. Did you know they require Civil Servants to register regardless of whether they can prove they are already insured otherwise?

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    • Anonymous says:

      Why have you referenced Ezzard here??? Alden is that you???

      As far as I recall CINICO was started/setup under Gilbert McLean. A bit of advice to you posters, get your facts in order and straight before making yourself look like a a total imbecile.

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  5. anonymous says:

    “Additional $4.53 million – additional to what?. We have so many intternational airlines flying in here from all over, why not save more than $15 million a year and put it into health coverage by winding up Cayman Airways. You can bet this subsidy is going to increase over the next few years with the new jets and long haul routes planned.

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  6. Anonymous says:

    Health Insurance and Pension. Nationalise health insurance at the lowest level. but please oh please don’t let the lowest level be the SHIC plan. That is an awful and shameful robbery of people’s premiums for so little coverage that they would be better off keeping the money in their own accounts. If health insurance is nationalised at the lowest level, which would be a basic, actually useful health coverage, then the risk and costs are spread over a larger pool of persons, ie. CINICO makes money. The private firms can then compete for coverage above this level and let market forces prevail.

    Do the same with pensions. Nationalise pensions. The issue of people not paying their employee’s pensions is reduced, especially if you tie the systems together, work permits, trade and business license etc. Then if firms want to offer enhanced pension packages they can do so above the national level. If pensions are nationalised, they can be managed by the Public Service Pensions Board, which has an excellent track record of returns… more conservatively invested than private sector, so less peak gains, but better performance over time.

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    • Anonymous says:

      The Government needs to have CINICO as the nations health insurance company. This way they will get the good younger clients plus all our senior citizens who (whether the rich fat cats like it or not) deserve a very affordable health system in there golden years. It is time now to set up a proper social security & medical plan for all. This one that is running now only benefits the have people and the rest can just lay on the side and die. Our whole problem is that the money dudes can swing the ruling governments so there will never be any change. Hell the ministers all get a wonderful health and welfare package so why do they want to “upset the apple cart”

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    • Say it like it is says:

      11.04am I could not agree more with your comments on the SHIC plan. This allows a patient 1 week in the mental health ward and then they have used up their LIFETIME coverage. What sort of nonsense is that?. Our MLA’s and civil servants don’t complain as they have the platinum plated unlimited coverage for everything. An absolute travesty, yet the poor on minimum wage have to pay sustantial premiums for ths ripoff “cover”:.

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  7. Totally disgusted says:

    Will the CIG or Ministry ensure that all persons who received illegal medical aid including cosmetic surgery are requiresd to pay back the total cost plus 25%. After all, receiving medical insurance coverage for something to which you were not entitled is akin to obtaining property by deception. Shame shame shame on the former CEO for making this available and even more shame on those who received it.

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  8. Anonymous says:

    The total problem with CINICO is management. Get rid of Ahearn, the health minister and put people who know how to manage an Insurance company in charge and you will see the difference.

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    • Anonymous says:

      Ugh! Why don’t you people get an education and stop posting drivel on CNS?!?!?!?!!!! CINICO is a statutory body. It is governed by a Board of Directors and managed by a CEO. The Chief Officer of the Ministry cannot therefore manage CINICO. The Chief Officer’s job is to liaise, apply pressure, work with, support and provide assistance in applying for funding for CINICO, but the responsibility to manage it properly lies ultimately with the Board, which is appointed by the Cabinet. The Minister cannot manage CINICO, if he did he would be crossing constitutional lines because politicians are not supposed to manage public service entities. That is the stuff that corruption is made of. The job of appointing someone who can run an insurance company lies with Board. Appointing someone who can run an insurance company as the Chief Officer or Minister is actually not a sensible approach, unless that is all that person is going to do, in which case you would appoint them as the head of CINICO not the head of the Ministry.

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      • Anonymous says:

        This sums up all the problems in Cayman. The fact that you believe that any statutory body in Cayman runs without government interference says it all. The statutory authorities are set up to hide all the incompetence that government does not want to have on its books so it can pretend that all is being well managed. Why do you need the NRA? Why aren’t they just CIG employees? Pretending that Cayman Airways is being run as a real business is hilarious. I would love to be able to adopt the same accounting for my business where I just record my revenues and pretend my expenses don’t exist.

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    • Anonymous says:

      Poster, you do underatand that CINICO now falls under the Ministry of Finance since last election. Just asking.

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  9. Anonymous says:

    So sad……

  10. Anonymous says:

    Nationalise CINICO, increase the insurance/insured base, reduce costs for everybody, increase the coverage.

    There. Done.

    You’re welcome.

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    • Anonymous says:

      Mmmm what exactly does nationalise mean to you?

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      • Anonymous says:

        Poster means force everyone to use CINICO. Free to get top up cover privately but everyone would have to get a basic policy from them. Let’s CINICO cross subsidize cost of insuring the unhealthy and indigent ( or paying for cosmetic surgery for the favoured few?) with everyone else’s premiums instead of getting stuck with everyone who can’t get insurance elsewhere

    • WhaYaSay says:

      How much more “nationalise” can a 100% GOVERNMENT OWNED company be?

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      • Anonymous says:

        It is ONLY available to civil servants and the elderly who pay for it, and get hardly any coverage.

        Meanwhile, the insurance companies are running their own “scheme” where companies are forced to pay for piss poor insurance with crappy coverage. If CINICO were available for EVERYONE, then the costs could be spread out, and everyone would get better coverage for less money.

        THAT’s what the poster was talking about.

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  11. Anonymous says:

    Pure worthlessness and slackness from every single department in Government, but what can we expect with “leadership” like this!?

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  12. Anonymous says:

    Cinico should have become what it’s name suggest ( Cayman Islands National Insurance Company) long ago. That was the premise under which it was created. Private sector insurance companies rolling in cash and Cinico going broke. Shameful is what it is. The last general manager didn’t help either.

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  13. Anonymous says:

    Keep on importing poverty, including family members of civil servants and family members of spouses of Caymanians, and dat wha u get.

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    • Anonymous says:

      Sweetie, don’t be such a bigot. If you haven’t noticed, the only poor ones around here is us Caymanians.

      Your “importation of poverty”, has nothing to do with the sad state of affairs of the Caymanian people, it is only a by-product.

      Look to your so called leaders, and their piss poor management, nepotism, and sell-out nature, then you’ll find the root cause.

      But hey, you all keep electing them in, and wonder why nothing changes.

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      • Anonymous says:

        Nothing to do with Bigotry. Just math. The economy has to add up to be sustainable. The numbers foretell a very sorry future if we continue as we are.

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