Senators to review worker insurance troubles

In a private conference with local labor activists Tuesday, Senate President Pete Reyes (I-Saipan) and Sen. Maria Pangelinan (D-Saipan) vowed to launch a government review examining the many cases of foreign workers owed money by insurance companies that cannot pay claims due to financial shortfalls.

Alien workers in the Commonwealth often receive insurance, purchased in the form of surety bonds, from their employers to safeguard them should the businesses where they work fold. The bonds provide money for unpaid wages, often as much as three months’ worth, and plane tickets to their country of origin.

Upon losing their jobs, however, many foreign workers find the insurance company that sold the bonds to their former employers lacks the assets to pay claims on the bonds, leaving them to pursue payment in the courts or go unpaid. Lax government regulation, insurance company and government sources say, has allowed these practices to continue unchecked.

Pangelinan in an e-mail said that Irene Tantiado, president of the Coalition of United Workers, a local labor group, will soon provide lawmakers with a list of unpaid workers to aid a review of each worker’s case.

Legislation on the issue, a crackdown on insurance companies by the Commerce Department or some form of government outreach to help employees obtain the wages they are owed are some of the options lawmakers might consider, she said.

“The meeting ended with the following understanding: each worker is unique in their case and therefore, a general solution for all would not be possible without reviewing each worker’s case history,” Pangelinan writes, adding that she, Commerce, and attorneys “are willing to assist, but we need to review each case situation and hopefully that will then lead us to some solution…Each employee has a unique case situation so each one might have different alternative options or solutions.”

At the meeting were Tantiado, representatives from the Bangladeshi and Nepalese communities, Senate legal counsel Tony Cabrera, and Deputy Secretary of Commerce Michael Ada. Commerce will address many of the issues raised during the meeting, Pangelinan said.

Before resolving the problems surrounding surety bonds, she added, lawmakers must also answer some key legal questions, such as whether claims can be brought against companies after a surety bond’s coverage period has expired.

Tantiado applauded the senators for holding the meeting, which she regarded as a step forward for foreign workers who have long sought unpaid wages.

“There’s a lot of hope for the workers now that something is going to be done,” she said.

Meanwhile, a new report from Commerce obtained by the Saipan Tribune apparently shows that at least a handful of insurers in the Commonwealth may still lack the solvency to pay workers’ surety bond claims.

The report shows that four insurance companies, all of which sell surety bonds, have liabilities much greater than their total assets, a factor that insurance company sources say could prevent them from paying worker claims.

How well the report reflects current conditions in the Commonwealth is unclear because it is limited to information from 2006. Reports for later years are unavailable, Commerce says, due to a long backlog of data that its staff has yet to analyze.

Ada declined to discuss the report, saying the governor’s office has yet to give Commerce permission to comment on it publicly.

The report also recommends the passage of legislation tightening insurance laws in the Commonwealth.