House Approves FAA Act Amendments to Remove $10b Cap on Disaster Reserve Fund

The House of Representatives, on Tuesday (January 20), passed amendments to the Financial Administration and Audit (FAA) Act, removing the $10-billion cap on the maximum amount that may be held in the National Natural Disaster Reserve Fund (NNDRF).

In her remarks, Minister of Finance and the Public Service, Hon. Fayval Williams, explained that the NNDRF was established following an amendment to the Act in June 2024.

She noted that the amendment establishing the Fund was designed to provide a disaster risk management facility capable of enabling an immediate financial response to any disaster affecting Jamaica that results in a fiscal impact equivalent to or greater than 1.5 per cent of GDP – approximately $55 billion – which would trigger a disbursement under a natural disaster instrument held by or on behalf of the Government.

“Currently, Section 13A (1) of the FAA Act provides that the NNDRF shall consist of issues from the Consolidated Fund principal bank account, from the triggering of natural disaster instruments and from other indicated sources of flows, such that the maximum amount of the NNDRF shall be $10 billion.

“However, it is important to note that, as a result of the passage of Hurricane Melissa on October 28, 2025, the disaster coverage for Jamaica was well in excess of $10 billion at approximately $115.7 billion. Hurricane Melissa, having triggered several of these instruments, has resulted in an expected flow of resources well in excess of the $10 billion, the maximum legislated for the NNDRF,” Mrs. Williams added.

The Minister noted that Jamaica’s robust disaster risk financing framework has enabled the rapid flow of funds to meet urgent response needs.

She explained that the framework facilitates the immediate inflow of critical liquidity to supplement the Government’s own contingency resources and expressed gratitude to Jamaica’s international partners for their continued support in this regard.

Mrs. Williams noted that, under the current provisions, mandatory annual transfers from the Consolidated Fund cease once the National Natural Disaster Reserve Fund (NNDRF) reaches or exceeds $10 billion. She explained that the proposed amendment will remove this cap.

It is further proposed that Section 13A (1) of the Act, which mandated a transfer of $200 million from the Consolidated Fund to the NNDRF during fiscal year 2023/24, be removed.

“This is being done because the NNDRF was neither approved nor operational during that financial year,” Minister Williams stated.