National Insurance Company To Be Formed

Hon Gilbert McLean

Friday, January 23, 2004

Minister for Health Services, Hon Gilbert McLean has announced that the government is to form The Cayman Islands National Insurance Company (CINICO) to benefit those who cannot afford insurance or those excluded by insurance companies

From 2 February, CINICO, operating under a board of directors, will provide and manage the health insurance scheme on behalf of the government. This will mean that the 10,000 residents of Cayman who are already covered by the government or who are deemed 'uninsurable' will now have access to affordable healthcare coverage.

The criteria for new participants to the scheme are: People over 60 not covered by insurance and/or unable to pay for their medical needs, self-employed or unemployed people who have an annual income of $30,000 or less and people who have impaired health and as a result have been rejected by at least two health insurance providers.

Mr McLean, who made the announcement at a press conference on Wednesday, said, "additional costs to the people of Cayman will be negligible, as the government is already financing healthcare claims for a quarter of the population."

The Minister also stressed: "CINICO is not competing with the private sector, instead it is going to manage resources in a more cost effective manner and provide relevant information to the country on the government's expenditure and provision of healthcare."

Although CINICO is not a profit-making body, it has been licensed by the Cayman Islands Monetary Authority and has met all the corporate requirements for insurance companies in the Cayman Islands.

The beginnings of a national health insurance scheme first came about in 1997, when a law was passed that made it compulsory for all Cayman residents to be covered by health insurance. However the law did not make it compulsory for insurance companies to offer cover to all Cayman residents.

As a result of being at the mercy of private health-insurance companies some have struggled to meet the cost of increasing health insurance premiums. Mr McLean said, "there is a pervasive feeling of hopelessness and vulnerability, because people fear having their coverage reduced or worse, being completely uninsured."

In an attempt to address what the Minister described as a situation, "which has the potential of causing far reaching economic and social disruption to the country," the Health Insurance and Health Advisory Committee, chaired by Permanent Secretary, Andrea Bryan was formed in 2001.

Following input from key people within the industry, both locally and internationally, the Committee recommended the introduction of a self-funded health insurance scheme managed by a Third Party Administrator (TPA).

Backed by reports from Mercer and KPMG and with approval from the Central Tenders Committee, the Minister hired US-based CBCA as a TPA in order to reduce the overall healthcare costs without lowering the level of healthcare within the programme.

For the CINICO policyholder, this means there will no longer be a limited choice of healthcare facilities as the TPA will search its network to find the most suitable healthcare facility available in the United States.

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