The Government of Bermuda has made a $500,000 payment to the Caribbean Catastrophe Risk Insurance Facility.

Finance Minister Paula Cox pledged $1.5 million to the fund in the 2008 budget.

The money will effectively be an insurance premium that could pay out to Bermuda in the event of a hit from a major hurricane.

The CCRIF was set up after the 2004 hurricane season caused devastation in the region. Heads of CARICOM (the Caribbean Community and Common Market) asked the World Bank to create a fund that could assist small Caribbean countries in the event of natural disasters.

Premier Ewart Brown stated: "The Government of Bermuda's commitment to proactive disaster mitigation is mirrored in the CCRIF concept. We are therefore very pleased to make this donation, not only because it strengthens the fund of which we are a member, but also because it supports a strategy all Caribbean governments can embrace — disaster risk must be managed long before the disaster."

Warren Smith, a member of the CCRIF Board, agreed that the donation would allow Caribbean governments to continue to put measures in place that would help to protect Caribbean states from earthquake or hurricane disaster.

"As a joint reserve fund, the CCRIF allows Caribbean governments to purchase unique coverage not available in the commercial markets at rates only achievable through the pooled approach," he explained. "With this donation the Bermuda Government provided the kind of endorsement we need to strengthen our efforts."

In the Budget statement, Minister Cox said participants have been requested to pay two years in advance to assist the CCRIF in its early years."

CCRIF also announced that it had successfully "incepted reinsurance to a value of $135 million, tapping both the international reinsurance and capital markets to cover the hurricane and earthquake policies renewed by the CCRIF's original governments."

A number of member governments have also increased their coverage for 2008.