Insurance a hot topic

A two-day law conference concerning property issues arising from Hurricane Ivan began on Tuesday at the Westin Casuarina Resort, with the topic of insurance dominating the agenda on the first day.

The Galleon Conference room was nearly filled to capacity with local attorneys, insurers, bankers, realtors and interested citizens for the event.

Five barristers, including Queen’s Counsel Jonathan Brock, from the prestigious Falcon Chambers of London presided over the oral presentation of topics at the event, while four local attorneys led the panel discussions after the presentations.

Conference chairman Anton Duckworth acted as moderator.

Cayman’s Attorney General Sam Bulgin noted in his introductory speech that the conference was very timely.

‘It is happening at a time when the Hurricane Ivan event, while still fresh in our minds, is sufficiently long ago that the inevitable, and I daresay unpleasant, consequences have begun to emerge,’ he said.

Mr. Bulgin suggested that Cayman’s experiences with Hurricane Ivan as they relate to law might prove a need to update the law to incorporate protection for the insured in the future.

Mr. Duckworth, noting Mr. Bulgin’s comments, said afterwards, ‘The Attorney General has laid down a challenge for what this conference should achieve.’

In many cases, however, the first part of the conference identified more questions than answers. This was partially because, as Mr. Brock pointed out, when it comes to insurance, the answers are not clear from English law, and insurance law in Cayman Islands is even less evolved.

Mr. Brock said insurance companies have two major problems. ‘One is that they are dealing with amateurs in almost all cases,’ he said, ‘And secondly, they are peculiarly vulnerable to fraud. Such an unbalanced market is bound to give rise to problems.’

Complicating matters is the fact that the Cayman Islands currently has no statutory controls of insurance terms and conditions.

Mr. Brock pointed to a couple of examples of insurance policies, noting that one from Barbados was particularly difficult to read because of the size of the print. He praised a policy draft from a local company for its ease in legibility, but noted that policy still contained clauses that were harsh toward the insured.

‘It should serve as a warning that even when the language looks friendly, it may not be friendly enough to the insured,’ he said.

Panel member Ward Sykes of Appleby Spurling Hunter acknowledged that Cayman law was unclear on a number of insurance issues. ‘But insurers and the insured are working together to resolve these issues. and that’s the bottom line,’ he said.

The panel discussed the timeliness of claim resolution. Mr. Sykes gave this suggestion on how to speed up the process: ‘Be thorough. Be complete. Be organized.’

Underinsurance was one topic of discussion in which many in the audience were interested. It was brought up in a question from the floor that some insurers are telling people they were effectively underinsured because of higher construction costs after the hurricane.

The panel members noted the uncertainty in the law, and they even differed as to when the value of a property subject to a loss is set, which could be at the time of the policy, at the time of damage, or at the time of reinstatement of the loss.

Mr. Brock noted that Cayman has enacted no legislation governing unfair terms in contracts as there is in England, and suggested it might be time to consider such an act.

Hector Robinson, an attorney for Quin and Hampson, responded that he thought it unwise to create legislation exclusively about contracts, but said it could be a good time to enact broader consumer protection measures.

At the close of the morning session, local Queen’s Counsel Ramon Alberga thanked Mr. Brock for what he called a most interesting talk. But while the attorneys in the audience seemed to find the morning session enlightening, some in the insurance industry were less impressed.

‘They didn’t answer one question,’ complained one insurance industry profession.