Hurricane Irma is leaving a wide path of destruction in her wake. Now is the time when governments need to access that “rainy day” money they have stashed away for such events. But what happens if the government has already spent that cash on other stuff?
U.S. Virgin Islands spent money intended to help after hurricanes
The U.S. Virgin Islands for years redirected money intended to help pay insurance claims after large disasters for other needs, raising the vulnerability of residents as Hurricane Irma ravishes the territory.
During years of yawning budget deficits, the U.S. protectorate tapped the V.I. Insurance Guaranty Fund to pay for other public services, according to government financial records reviewed by Reuters. Since 2007, nearly $200 million was transferred from the fund, including $45 million in fiscal 2011.
Insurance guaranty funds, present in every state and some territories, pay outstanding claims to residents and property owners if an insurance company becomes insolvent…
In 2012, government leaders reduced the minimum balance of its insurance guaranty fund to $10 million from $50 million. The fund earns about $16 million annually in revenue.
Territory officials could not be reached for comment on Wednesday. In response to questions from Reuters about the fund in late July, government officials responded that it had “borrowed money from time to time, but this has not been an issue.”
Will anyone be held accountable for this? Probably not.
H/T to Instapundit.