CIMA Investigates Unfair Practices Claims

Cabinet has asked the Cayman Islands Monetary Authority (CIMA) to investigate claims of unfair insurer practices. CIMA is responsible for regulating the industry and will report to Cabinet via the Financial Secretary.

“Government has maintained an open mind about the allegations,” said Attorney General Samuel Bulgin. “Nevertheless, in the absence of consumer protection legislation, we are duty bound to investigate these claims.”

As a prelude to the Cabinet decision, the Cayman Islands Recovery Operation (CIRO) had several internal discussions focusing on public concerns. These appeared to be so widespread that CIRO raised the matter at Cabinet level.

Among issues discussed by CIRO were public complaints of the industry’s adoption of across-the-board dollar figures per square-foot in assessing replacement value of homes. The claims are that adjusters of some insurance companies are applying this rate indiscriminately, resulting in a seemingly widespread assessment that homeowners are underinsured.

Other complaints surround the actual damage assessment, while some people allege that there is undue dragging of feet in settling claims.

Of particular concern to Cabinet is the report that some vehicle insurers may be deducting the reduction in duty on replacement cars from the settlement on damaged cars. “If that is so, it is untenable,” said Mr. Bulgin, who however reiterated that the government and the public should continue to maintain an open mind until all the facts were in.