The arrangement was to provide homeowners insurance for mortgage holders.
Officials at the Bank of The Bahamas, meanwhile, are concerned that the institution may be caught up in the bad publicity the insurance company appears to be receiving.
In a memo to the bank’s staff late last year, Human Resources Manager Emily Demeritte informed that, “Effective December 1st…all Staff with mortgages must purchase homeowners insurance through an arrangement the Bank has established with Colina General Insurance Company.
“Coverage with Colina is mandatory for all mortgages on the Bank’s books. All staff with mortgage loans are asked to transfer their coverage to Colina. Colina has agreed to match the rates the Staff presently pay in those cases where their rate might be higher. This ensures that no employee will lose by transferring to this carrier.”
The Bank’s Managing Director Paul McWeeney, who has in the past been forced to clarify the matter, said again on Friday that the memo was “a mistake” and was immediately retracted.
“The wording of the memorandum was not the intention of the bank,” Mr. McWeeney told the Bahama Journal. “It was retracted because, in fact, the wording did not support our actions with the staff.”
He said no staff member was forced to change his or her policy at any point in time.
Mr. McWeeney added that while the memo said that coverage with Colina was mandatory “for all mortgages on the Bank’s books”, the memo referred only to staff mortgages.
“A few staff members did speak about it and that was when it was immediately dealt with,” he said. “No employee was subject to any forceful nature to having that done.”
Mr. McWeeney also explained that the bank, in choosing Colina, sought only to put in place a backup protection mechanism because it was finding that a high amount of persons with mortgages were not keeping their insurance up to date.
It assists in mitigating risks, he said.
“The client would receive a notice confirming that we have not received the relevant renewal,” Mr. McWeeney said. He said in this case, a client would be temporarily covered by the bank’s internal plan.
At this point, he said clients, including staff members, are given an option whether they would want to continue with the coverage the bank has in place through Colina or make their policies with other companies current.
He said Colina was chosen for the arrangement “purely on market-driven terms”
When asked whether Colina had any unfair advantage in securing the deal, Mr. McWeeney said “no.”
He said in the future the bank intends to allow the market to bid on such contracts annually, but he refused to say whether bidding happened in this particular case.
However, he also said the bank was approached by Colina and determined that the company’s offer was a fair one that would be in the best interest of clients.
“This is a relatively new product for the bank,” Mr. McWeeney said. “When it comes up for renewal, everyone would have a chance to bid on it and let the market set the terms.”
The Bahama Journal
