Govt. insurance bill disputed
The Chief Executive Officer of the Ministry of Finance (M.O.F.), Leasiosiofa'asisina Oscar Malielegaoi, has disputed claims that the Government is footing an annual bill of $30 million to insure its assets.
The figure is contained in a report on the 2019-20 Financial Year by Parliament’s Finance and Expenditure Committee, which found the Government was expending $30 million a year on its premiums.
But Leasiosiofa’asisina said the Government was self-insured under a scheme that requires it to allocate funding of $4.2 million a year to establish full coverage of Government buildings.
“For the Ministry of Finance’s budget [for F.Y. 2019-2020] it's clear in there: the specific budget is $4.2 million for Government assets only for Government buildings," he said.
"[The Committee] may have estimated their figures; [I am] not sure where they are getting their numbers.
“But $4.2 million is allocated for government buildings. In the past we [used] to pay insurance, but are no longer paying insurance, as a result of the government’s self-insurance scheme.
“This was effective as of 1 July . Every month we set aside money for insurance, but we don’t take out the full $4.2 million.”
Leasiosio explained this insurance covers all Government building excepting state-owned enterprises which are obliged to provide their own insurance.
The C.E.O. said the shift to a self-insurance scheme was designed to provide the Government with financial assistance when it was most needed.
“Agents selling insurance [may offer] appealing packages, but when something happens, you have to go through a process that will take up to a year before you can actually get assistance," he said.
"The expectation was that once something happens, you get your money right away.”
Leasiosio said the self-insurance scheme was based on an annual allocation of funding which could be drawn upon in times of emergency. “We set aside $4.2 million per annum and by ten years’ time [if] we don’t use that money, the Government has $42 million to fall back on in times of natural disasters like a tsunami," he said.
"Once it happens, we can mobilise those funds right away and we don’t have to wait for our overseas partners."
Vehicle insurance is separate to the overall insurance funding pool, the C.E.O. clarified. Each Ministry and state-owned enterprise is required to provide its own budget for the cost of vehicle coverage.