Lieutenant Governor Gregory R. Francis is calling on insurance companies throughout the Virgin Islands to lower their rates for Virgin Islands consumers.  Lt. Governor Francis, in his capacity as the Territory’s Commissioner of Insurance, said his plea is based on the fact that the Virgin Islands have been without a major hurricane or natural disaster for the past fifteen years.

“I am committed to ensuring a fair and robust insurance market in the Virgin Islands,” Lt. Governor Francis said. “But during this time of economic hardship, there is a need for a reduction in rates compatible with risk.”

He added that the Virgin Islands boasts one of the strongest building codes in the region and nation, providing an insurance market that is safe and secure. He said the tendency of underwriters to classify the U.S. Virgin Islands with coastal regions in the southeastern United States and other Caribbean Islands does not accurately represent the Territory’s actual level of risk.

Lt. Governor Francis has long championed a reduction of rates for consumers, making this effort a priority when he met two years ago with the Chairman of Lloyd’s of London, a major underwriter in the Virgin Islands. In November, Banking & Insurance Director John McDonald made a formal request in writing, reminding insurers that there has been no “significant loss activity” in the Territory and noting that the current rates have been in place since April 2004.

“As you prepare to enter into negotiations in the reinsurance markets and renew your treaties, we again ask that you and your brokers emphasize a need for reduced rates,” Director McDonald wrote in the letter dated November 16, 2009, adding that premium rates increased after Hurricanes Hugo and Marilyn.

Acknowledging that the current economy may have also led to lower than expected profitability for insurance companies, he reiterated that consumers have also been heavily affected.

“…The customers in the U.S. Virgin Islands should not be confronted with continually increasing rates when the core underwriting risk has remained constant for a number of years,” Director McDonald wrote.

Lt. Governor Francis said he is hopeful insurance companies in the Virgin Islands will work with their underwriter to provide their consumers with fairer premium rates. “There are too many people going without home insurance because they simply can’t afford it.”

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