Senators on the Committee on Budget, Appropriations, and Finance are attempting to pass Bill No. 35-0026, a measure that would provide added protection to insured Virgin Islands homeowners by allowing insurance companies to be eligible for membership at the Federal Home Loan Bank in New York. The bank aims to reduce the chances of insolvency for locally licensed insurance companies, offering a safety net for them in times of disaster.

The proposed legislation serves as secondary protection for insurance companies, allowing them to minimize their risk of failure when they need significant amounts of cash to finance insurance claims. Glendina Matthew, the acting director of the V.I. Division of Banking, Insurance, and Financial Regulations, called the bank “an excellent resource for insurance companies,” as it could provide additional liquidity during insolvency or troubled situations, benefiting policyholders.

Committee Chair Senator Donna Frett-Gregory said that the measure could potentially reduce insurance costs in the territory, but the main goal is to ensure solvency for residents with insurance policies. If passed, insurance companies would have to meet specific financial conditions and other eligibility requirements to remain viable.