The Cayman Islands National Insurance Company (CINICO) plans to expand its health insurance coverage to more people and add new lines of property and casualty insurance business.
Deputy Prime Minister and Finance Minister Chris Saunders said in a press release that CINICO’s expanded health coverage would reduce costs, provide health care to more people and respond to “calls from Caymanians and uninsured and underinsured residents who have gone unanswered for too long. long”.
CINICO is the state-owned health insurer for 10,200 civil servants and pensioners, 1,100 sailors and veterans, 1,800 indigents and 2,000 members of the Standard Health Insurance Contract (SHIC) scheme.
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.
CINICO will also offer 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, the government said.
Saunders said: “At a higher level, CINICO’s expansion will deliver on the commitment made in our Strategic Policy Statement (SPS) to ensure an equitable, sustainable and successful healthcare system as well as provide solutions to improve the well-being of our people so they can realize their full potential.
“On the ground, we are delivering on our promise to provide the public with an affordable option and includes a mechanism to cover pre-existing conditions for eligible Caymanian retirees,” he added.
Other near-term expansion plans include providing property and casualty insurance, covering home and auto, 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 said expanding health care coverage and adding new lines of business would diversify CINICO’s risk profile and, by extension, risk to government.
“Over the 14-year period between 2009 and 2023, base government health costs are projected to increase by 120%, from nearly $91 million in 2009 to just under $200 million in 2023” , did he declare. “Health care costs average 19% of total core government operating expenditures, indicating that it is becoming more difficult for the public purse to support rising costs.
Noting the withdrawal of a major insurer, Generali Worldwide, from the Cayman Islands market in December 2021, the Deputy Prime Minister said the expansion of the national insurance company’s products would also protect residents against the risk of getting find themselves without cover in the event of further closures in the private insurance sector. .
“Withdrawal [of Generali] was 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,” Saunders said. . “To mitigate similar shocks to 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.”
CINICO intends to finance the expansion with existing excess capital. However, the public insurer will need additional capital for the planned expansions in P&C insurance.
On April 5, the Cabinet approved CINICO’s expansion plans and required additional funding of $10.35 million, covering $5.35 million in 2022 and $5.0 million in 2023, under Section 12 of the Public Management and Finance Act (2020 Revision). Funds will need to be approved at the next session of the Finance Committee, scheduled for May 2022.
CINICO CEO Michael Gayle noted that “health care costs continue to skyrocket, but we believe that working with our sister organization, the Cayman Islands Health Services Authority, and with external medical providers with whom we will enter into a Preferred Provider Network Agreement, collectively we can play a role in bringing some stability to healthcare costs here in Cayman.
He added: ‘We also look forward to adding options to the existing list of home and auto insurance options.
Saunders added: “It is long overdue for CINICO to truly become a national insurance provider.”
He said the public needs more insurance options, especially for 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 imposes an unbearable burden on pensioners, 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 allowing our seniors to age in good health and dignity. Through such timely and careful expansions, we hope to see CINICO eventually become the insurance provider of choice for all Cayman Island residents,” said Saunders.