The government has indicated that before the end of 2022, the Cayman Islands National Insurance Company (CINICO) will launch a plan to expand into new lines of business aimed at offering a wider choice of health insurance coverage. to more people.
Regarding the expansion, Deputy Prime Minister and Minister of Finance and Economic Development Chris Saunders said he and his PACT colleagues “have addressed the issue of health insurance both broadly and specific and are now “turning our ideas into reality”.
He also noted that “expanding CINICO’s health coverage to a wider population will help achieve several of this government’s goals and answer the calls of Caymanians and uninsured and underinsured residents who have gone unanswered since too long”.
According to the government, the plan is for CINICO to first expand health insurance services to a wider population by developing affordable health insurance plans for younger and healthier residents, followed by a plan for retirees; and offering a health insurance option to civil servants allowing a choice of health care providers, which will require the establishment of a local network of providers.
As for the sustainability of the plan, Saunders said:
At a higher level, CINICO’s expansion will fulfill the commitment made in our Strategic Policy Statement (SPS) to ensure an equitable, sustainable and high-performing healthcare system as well as provide solutions to improve the well-being of our people so that they can achieve their goal. full potential. On the ground, we deliver on our promise to provide the public with an affordable option and includes a mechanism to cover pre-existing conditions for eligible Caymanian retirees. We associate our actions directly with our words to better benefit the inhabitants of these islands.
Other near-term expansion plans include the provision of property and casualty (home and automobile) insurance to public sector employees and their families. CINICO aims to provide health insurance coverage to younger, healthier residents by the end of the year, and to retirees thereafter. P&C operations are expected to begin in Q4 2022 or Q1 2023.
Saunders pointed out that expanding healthcare coverage and adding new lines of business would diversify CINICO’s risk profile and, by extension, the risk to the government.
Over the 14-year period between 2009 and 2023, central government health care costs are projected to rise by 120%, from nearly $91 million in 2009 to just under $200 million in 2023. Health care costs average 19% of total central government operating expenditure. , indicating that it is becoming more difficult for the public purse to meet rising costs.
Referring to the withdrawal of a major insurer from the Cayman Islands market in 2021, Saunders noted that the expansion of the national insurance company‘s products would also protect residents against the risk of being left without cover in the event of further closures. in the private insurance industry.
The withdrawal came as a shock to the market as many individuals and businesses had to find new health insurance providers and people, especially those with pre-existing conditions, found it difficult to obtain affordable health insurance. To mitigate similar shocks in the Cayman market in the future, it is important that the government is able to provide individuals and businesses with the option of affordable health, car and home insurance.
With respect to funding expansion of product and service areas, CINICO currently has sufficient excess capital to fund planned health insurance expansions. However, CINICO will need additional capital for the planned expansions in property and casualty insurance. On Tuesday, April 5, Cabinet approved CINICO’s expansion plans and the required additional funding of $10.35 million ($5.35 million in 2022 and $5.0 million in 2023), via the Section 12 of the Public Management and Finance Act (2020 Revision). Approval of these funds will go to the next session of the Finance Committee, which is scheduled for May 2022
CINICO CEO Michael Gayle noted that his management team is excited about CINICO’s expansion prospects and future.
We look forward to playing our part in making things better for our people in these Cayman Islands. Healthcare costs continue to soar, but we are confident that by working with our sister organization, the Cayman Islands Health Services Authority, and with external medical providers with whom we will enter into a network agreement as preferred providers, we can collectively play a role in stabilizing healthcare costs here in Cayman. We also look forward to adding options to the existing list of home and auto insurance options. Exciting times are ahead at CINICO.
It is high time that CINICO truly became a national insurer. The potential has been there and must now be realized to provide the public with more insurance options – health, property and auto – that they need. This is especially true when it comes to health insurance, which is becoming more and more expensive, with more and more of our retirees being excluded due to pre-existing conditions, or simply aging at 65 from private insurance plans. This places an unbearable burden on our retirees, which then falls on the government. The expansion of CINICO will both reduce these costs and provide health care to more of our fellow citizens, while enabling our seniors to age in good health and dignity. Through such timely and prudent expansions, we hope to see CINICO eventually become the insurance provider of choice for all residents of the Cayman Islands.