POLICIES, REGULATIONS & CONSUMER CONCERNS RELATED TO PROPERTY INSURANCE IN FIJI A HOUSING AUTHORITY PERSPECTIVE PRESENTATION TO STAKEHOLDERS WORKSHOP THURSDAY 11 TH AUGUST 2016 NOVOTEL HOTEL, LAMI

T YPES OF I NSURANCE C OVERS P ROVIDED T HROUGH H OUSING A UTHORITY Housing Authority as mortgage financier provides:- Contractor Works and Public Liability cover which covers properties during construction phase. This is provided for all our consumers who obtain construction loan from HA to build their residential dwellings. House Insurance cover for its home loan consumers only under a Group Scheme which covers properties in an event of Cyclone, Windstorm, Hurricane, Earthquake, Subterranean Fire, Volcanic Eruption, Tsunami, Flood, Fire and Malicious Damage as it is a security held under the mortgage. Group Mortgage Protection Insurance Policy which responds in an event of death and/or total permanent disability. This is further extended to cover customers for cardiac and cancer treatment in India. (This is an optional cover for customers earning $16,500 per annum)

H OUSING A UTHORITY H OUSE I NSURANCE P ROVIDERS These two Policies are placed with New India Assurance Co. Ltd through our Insurance Brokers, Marsh Ltd. For Group House Insurance Policy, New India Assurance is the only insurer that provides HA a full cover for all mortgaged properties. This is inclusive of properties without valid engineers certificate. A substantial proportion of our low income target market are not able to afford Engineering upgrading certification after every seven years, thus potentially disqualifying them from the cyclone cover.

I SSUES & C HALLENGES Customers overlook some important information regarding insurance covers to the property whilst signing their letters & mortgage documents. Customers have difficulty understanding what is policy excess and why they have to pay the excess when they are paying insurance premiums. Lack of appreciation for due process required in the processing of claims. E.g. In an event of a fire, the loss assessor, structural engineers and quantity surveyors are engaged for a comprehensive assessment which takes 6-8 weeks. No other reputable insurance company apart from New India Assurance is willing to underwrite the full Group House Insurance Cover for HA for a known fact that not all of HA’s properties are with valid cyclone certificates.

I SSUES & C HALLENGES There is a lack of Insurance providers in the country who are willing to underwrite this cover for HA which leaves very little room for competition so as to negotiate lower premiums to affordable levels for our low income target market. (Monopoly) With current underwriters, HA has to maintain both the “self- insured retention” (aggregate) and “policy excess” running parallel annually. This we believe is unfair as insurer should maintain only one of the two at any one time. After major natural disasters, premium normally increases for the new insurance period. Customers at times cannot afford further increases in their repayments and their mortgage accounts risk falling into arrears. Fencing, gates & other accessories such as hot water systems are not covered by insurance in an event of a natural disaster (cyclones, windstorm, hurricanes only).

C URRENT P OLICY E XCESS ON H OUSE I NSURANCE P OLICY FOR M ORTGAGED P ROPERTIES

C LAIMS E XPERIENCE

TC W INSTON C LAIMS E XPERIENCE

VINAKA