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Do not leave risk management apparatus to Government Cole Simons

Government needs to create an independent risk management division to help prevent spending millions annually in insurance premiums, according to Shadow Estates Minister Cole Simons.

“Over the past three years the Bermuda Government has paid in excess of $38 million in insurance premiums for its liability insurance, and its property insurance for its 780 properties,” Mr Simons said.

“Obviously we cannot leave Bermuda’s risk management functions with this Government.”

His statement followed the budget debate on the Ministry of Estates and Information Services.

That Ministry had budgeted $8.7 million for insurance for the year 2012/13, the same amount budgeted last year.

Overall, Government has budgeted $12.915 million to pay for insurance in the coming year, $20,000 more than was budgeted for 2011/12 but $10,000 less than what was actually spent, according to revised estimates.

A similar amount, $12.977 million, was spent in 2010/11 on insurance.

Responding to the figures, Mr Simons said an independent risk management division could save money by standing as the central risk agency for government and acting as risk advisor for all other government ministries.

If created, it should also be responsible for risk management programme development and delivery, along with all claims administration and all risk-associated litigation matters.

“Risk financing will be another role, and the division will be staffed with successful insurance professionals who will purchase all insurance on behalf of all ministries,” Mr Simons said. “This will be also extended to include hospitals, schools, Government’s maritime fleet, its automobile fleet and employee benefits insurance.

“It should also be noted that the department would have the ability to develop alternative risk financing programmes including traditional insurance and self-insurance programmes which have proven to be an effective method of funding losses, and saving the government and the people of Bermuda millions of dollars over the years.

“During these economic times, it is shameful that this Government has not examined these options in its austerity programme. We cannot continue to pay $12 million in insurance costs each year. It is simply irresponsible.”

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Published March 20, 2012 at 10:02 am (Updated March 20, 2012 at 10:01 am)

Do not leave risk management apparatus to Government Cole Simons

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