The Turnbull administration has a major crisis on its hands: Teachers are on strike, public school students are again missing classes and the powers-that-be must find some source of funding to end this crisis.
It is tempting, of course, to tap into the Insurance Guaranty Fund. But this would be a short-term solution with long-term negative ramifications.
That kind of irresponsible approach drove many legitimate insurance companies out of the territory in the first place. They felt the Virgin Islands was insurance-unfriendly and irresponsible in its approach to settlements. What better way to prove that than to raid the Guaranty Fund, leaving insured property owners in a potentially precarious position if their insurance companies should default.
Further, with the territory’s major property insurers rapidly reaching, or at, capacity, adding additional strain to the market could invite rate hikes and leave homeowners and commercial property at great risk if we were to have even a minor storm or other natural disaster.
The idea of reducing the fund's cap reeks of short-term memory loss on the part of the administration and Legislature. After Hurricane Hugo three insurance carriers went belly up, leaving many property owners financially devastated. The fund was set up five years later to avoid such devastation.
Experts expect that by Jan. 1, 2001, the $10 million that Sen. David Jones is seeking to obtain by reducing the fund's cap from $50 million to $40 million will begin to be available anyway. The fund is expect to easily reach its cap by Jan. 1. Thereafter all the premium taxes that support the Guaranty Fund will automatically spill over into the general fund. Wait three months and the problem may, at least in part, begin to solve itself.
Our hearts go out to the teachers. What they are asking is reasonable and appropriate. However, it is imperative that the government act responsibly in finding solutions to these problems.
It does little good to look backwards, but what if the initiatives set forth in the memorandum of understanding with the Interior Department more than a year ago had actually been implemented? Like maybe 50-50 sharing of retirement and insurance benefits, or cutting red tape to make the Virgin Islands more business-friendly, or overhauling the Industrial Development Program, or seriously implementing the cost-cutting measures so blithely announced. Maybe then there would have been extra money now to help pay the teachers what they are owed.