Many home and automobile owners in the Cayman Islands could now have inadequate insurance with the announcement that the Jamaican-based Dyoll Insurance Company is insolvent.
Other Dyoll policy holders waiting on claim settlements might have a long wait.
Cayman Insurance Centre, the Cayman Agent for Dyoll, issued a press release on Wednesday saying the Financial Services Commission of Jamaica (FSC) and Temporary Manager of Dyoll Kenneth Tomlinson carried out a review of the insurance company’s financial position and found it to be insolvent.
Efforts by the FSC and Dyoll to recapitalise were unsuccessful.
Almost all motor insurance policies and three-quarters of all property insurance policies issued through Cayman Insurance Centre were Dyoll policies, the press release said.
The press release stated that Dyoll’s Jamaican portfolio had been sold, but not the Cayman portfolio.
‘At this point, negotiations for the sale of the Cayman portfolio insured by Dyoll have not yet commenced, although there has been at least one expression of interest from an insurance company.’
With the Cayman portfolio effectively in limbo, the press release cautioned Dyoll policy holders.
‘Holders of Dyoll policies of insurance (including motor and property policies) obtained through (Cayman Insurance Centre) should be aware that those policies may not afford sufficient cover in the event of a claim being made thereunder,’ the release stated.
The situation has left policy holders like Juliet Suberan worried.
‘If my house burns down today, what’s going to happen to me?’ she asked. ‘What should I do? Should I get other coverage?’
One Dyoll motor policy holder noted that his vehicle coverage ‘is probably worthless.’
‘We may need to make other arrangements straight away to comply with our obligations,’ he said.
Questions put to the Cayman Islands Monetary Authority concerning how those with third party motor insurance should proceed in order to be compliant with Cayman law were unable to be answered by press time.
Other Cayman policy holders that could be affected are those with outstanding claims, including those with damage from Hurricane Ivan.
The press release noted that any purchaser of Cayman’s Dyoll portfolio would not assume responsibility for outstanding claims.
‘Dyoll will continue to responsible for those claims, which will be dealt with by the Temporary Manager of Dyoll,’ the release stated.
The resolution of outstanding Dyoll claims, however, remains uncertain.
‘At this point, the FSC and the Temporary Manager are unable to say what portion of the unpaid claims will be paid, or how long it will take to make this determination,’ according to the press release.
According to a report in the Jamaican Observer last week, Dyoll is exposed to as much as $100 million of claims in Cayman, over and above its reinsurance coverage.
The potential loss in Cayman exceeds the original projections significantly as a result of an over-statement of the reinsurance recovery on Dyoll’s un-audited financial statements as of 31 December.
The Jamaican Government declined to bail out the troubled insurance company.