The government’s insurance company CINICO posted a profit for the second consecutive year last year, despite being owed almost $8.2 million in outstanding premiums and fees from the government.
According to the 2009/2010 annual report, tabled at the Legislative Assembly last week, the company reported a profit of $3.5 million, as of 30 June, 2010. In the financial year, 2008/2009, CINICO reported a $5.8 million profit and had annual losses every year prior to that since its creation in December 2003.
“The profitable position was made possible by favourable underwriting developments from the prior year, in addition to low administration expenditure levels,” a management statement from the company read.
According to the financial statement, as of June 2010, the government owed CINICO almost $8.2 million for outstanding premiums, administrative services only claims and fees receivable.
Auditor General Alastair Swarbrick, in his report on the insurance company’s finances, pointed out that $4.3 million of the $8.2 million for outstanding premiums, administrative services only claims and fees receivable related to the 2008/2009 fiscal year, the settlement of which would require the approval of a supplementary budget by the Legislative Assembly.
CINICO officials said they expected a loss in the current 2010/2011 financial year, due to growing local and overseas claims losses and a lowering of its premium rates to its largest policy holder – the government.
“To compensate for the reduction in premium, the company will be intensifying its focus on claim losses and other expenses,” a joint statement from CINICO’s general manager Carole Appleyard and chief financial officer Frank Gallippi.
Among the losses it faces is an expected 10 per cent increase in its overseas claims losses.
They said the introduction of the proposed Shetty hospital would decrease the number of overseas referrals, but would not have an impact on CINICO for some time because the facility would be built over a 10-year period. The insurance company further suggested that proposed changes to the insurance law, the pilot CayHealth programme, a proposed new verification and billing system at the George Town hospital
The company stated that its net worth as of 30 June, 2010, was $12.5 million, up from just $190,000 two years earlier.