In what has become a periodic budgetary ritual, on Wednesday Senators voted to cut the cap of the Insurance Guaranty Fund from $50 million down to $10 million, to help balance the government’s budget for next year.
The fund does not have $50 million but a smaller amount.
The Insurance Guaranty Fund is a sort of re-insurance for insurance companies. The money is to compensate policy holders if their property insurance carrier goes belly-up and cannot pay. It was created in 1984 after the Dome Insurance Company went under, leaving V.I. policy holders on the hook for $48 million in unpaid settlements. It is fed by most of the 5 percent gross premium taxes that insurance companies pay to the V.I. government and usually receives around $16 million per year.
All 50 states, the District of Columbia, and Puerto Rico have similar funds.
It was set at $50 million in 1990, the year after Hurricane Hugo devastated St. Croix.
The territory has cut the fund to less than that amount every year since 2008, when it borrowed $40 million from the fund to partially pay retroactive pay raises for government employees. That year, it replaced the money with a letter of credit, in effect borrowing it. In the years since then it has routinely cut the cap to $10 million. In February 2012, while the territory was struggling financially from the aftermath of the worldwide financial collapse, the Legislature passed a law reducing the cap until 2015. In 2015, it amended that act, extending it until 2017. Wednesday, the Legislature amended it again, extending it to 2019.
Senators said they recognized the importance of the fund but some felt insurance companies should not need government help.
“The insurance company has a responsibility to purchase reinsurance. … It is not supposed to be the responsibility of the government of the Virgin Islands,” Sen. Kurt Vialet (D-STX) said. Vialet chairs the Finance Committee. He said recent legislation improving and modernizing regulation of insurance in the territory should help lessen the risk.
“A number of agencies have been notified they are waiting for action on this measure to be funded. … So yes, on the one hand I want to see the fund built back up. But on the other hand I want to see these agencies funded.” Sen. Novelle Francis (D-STX) said.
Senators also put on the agenda and approved a bill from Sen. Sammuel Sanes repealing the requirement to have photos of candidates on the ballots. The election system has not put the photos on ballots for years, either with the current voting machines or the previous ones, despite the law, due to difficulty, expense and impracticality.
Sen. Alicia “Chucky” Hansen (I-STX) said she opposed the change, saying people may not know the name of a candidate but may recognize them.
Sen. Francis said the photos are too small to go on the ballots because “there are too many names appearing on the ballot at any one given time.”
Voting for the repeal were: Francis, Sanes, Sens. Marvin Blyden (D-STT), Jean Forde (D-STT), Myron Jackson (D-STT), Neville James (D-STX), Janelle Sarauw (I-STT) and Brian Smith (D-At Large). Voting no were Sens. Dwayne DeGraff (I-STT), Janette Millin Young (D-STT), Positive Nelson (ICM-STX) and Tregenza Roach (D-STT). Hansen abstained. Sen. Nereida Rivera-O’Reilly was absent.
Another bill increased veterans burial benefits to $5,000 from its previous $3,500.
Zoning and Coastal Zone Management
The Legislature voted to override Gov. Kenneth Mapp’s veto of a spot rezoning requested by Luis and Ludymar Ortiz to rezone Plot No. 56 of Parcel No. 67 of Estate Mount Welcome from R-1 to R-3, residential medium density, to build a three-story, two-family house.
Nelson said the measure would later be amended to address the governor’s objections. The Legislature did not amend it Wednesday.
The Department of Planning and Natural Resources recommended against the spot-rezoning, saying it was “out of character with the surrounding properties and general area” and Mapp said he felt DPNR raised “very valid concerns … .”
Senators also approved a rezoning on land VIGL is leasing from the government adjacent to the Randall “Doc” James horse track on St. Croix. VIGL wants to extend its track onto that land to make it a mile in length. Right now, the track is seven furloughs, or seven eighths of a mile. The action rezones 19.5 acres at Parcel No. 4B Estate Bethlehem Middle Works, Kings Quarter, St. Croix from P (Public) and I-1 (Heavy Industry) to P (Public).
Also approved was a use variance for Dr. Hubert H. Watty for Plot No. 6 Estate Clifton Hill, Kings Quarter, St. Croix to allow for medical clinic laboratory services and medical offices.
The Senate approved resolutions honoring honoring and commending William Bohlke, Jr. and Tim Duncan. One resolution cites Bohlke for his “assistance in the introduction of the National Oceanic and Atmospheric Administration Hurricane Hunters” and “numerous contributions toward the Virgin Islands through business and philanthropic efforts.” The other cites Duncan “for his professional career accomplishments and his proven dedication to the restoration of the Virgin Islands through philanthropic efforts.”