Caribbean countries joined by outside donors and international and regional organizations established a $47 million insurance pool to soften the blow from earthquakes and hurricanes.
Called the Caribbean Catastrophe Risk Insurance Facility, the program grew out of member governments’ determination to rebuild quicker after catastrophic natural disasters.
The World Bank helped the 18 contributing governments establish the facility. It said they would save about 40 percent in premium payments by pooling their risks and would have money available immediately should disaster strike.
The facility will operate by allowing governments to buy catastrophe coverage similar to coverages for businesses to protect against interruption of operations by providing them with early cash payments after a major hurricane or earthquake.
Hosted by the World Bank, ministers from the 18 countries signed off on the arrangement at a conference with international and regional organizations and donors including Canada, France, Britain, Japan, the European Union.
Heads of government from the Caribbean Community, a regional transnational organization, asked the World Bank to help organize the facility after the 2004 Hurricane Ivan roared through the Caribbean. It clobbered Grenada, Barbados and other islands as well as the southern United States and was blamed for 121 deaths. An estimated 90 percent of homes on Grenada were damaged.
World Bank statistics show that a major hurricane affects a Caribbean state every two years and responses to them are severely limited by lack of resources. Ivan’s hit on Grenada caused losses up to 200 percent of the island state’s gross domestic product.
Participating countries are Anguilla, Antigua and Barbuda, the Bahamas, Barbados, Belize, Bermuda, British Virgin Islands, the Cayman Islands, Dominica, Grenada, Haiti, Jamaica, Montserrat, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, Trinidad and Tobago and Turks and Caicos Islands.
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