World Bank creates hurricane fund for Caribbean nations

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Caribbean countries hit by hurricanes now have a new source of emergency relief funding, a multi-country insurance pool introduced by World Bank.

The new plan, called the Caribbean Catastrophic Risk Insurance Facility, was unveiled at an unusual meeting hosted by the World Bank in Washington on Feb. 26 that included representatives of 18 CARICOM (Caribbean Community) nations and representatives from the donor countries: the U.S., Canada, France, the U.K., Japan and the European Union.

The genesis of the CCRIF was Hurricane Ivan, which devastated several Caribbean countries in 2004.

Governments asked the World Bank for its assistance in establishing an insurance system that would provide countries with immediate liquidity in the face of a natural disaster and enable them to launch relief efforts quickly with access to immediate financial funding, said a World Bank spokesman.

In a show of support and to get the CCRIF off the ground, the donor countries pledged and earmarked $47 million for the CCRIFs reserve fund.

The CCRIF member countries, including but not limited to the 18 Caribbean nations that attended the Feb. 26 meeting, pay a nonrefundable entry fee and an annual premium, which varies according to the countrys risk profile.

Pooling the risk will save the 18 CARICOM countries approximately 40% in individual premium payments and will allow governments to purchase coverage that entails early cash payments after a hurricane or earthquake, according to the World Bank. The amount of individual premiums from each participating Caribbean country ranges from approximately $200,000 to $4 million.

The World Bank aims to make the insurance available for the upcoming hurricane season, which begins June 1.

To contact reporter Gay Nagle Myers, send e-mail to [email protected].

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