BASSETERRE, St. Kitts - THE Eastern Caribbean Currency Union (ECCU) Governments through the communiqué of the Monetary Council has provided the first update for 2012 regarding the progress of British American Insurance Company (BAICO) and Clico International Life Insurance Company (CIL) matters.
British American Insurance Company
The ECCU Governments stated that the process for the sale of the traditional insurance business should be completed well before the end of this year as a number of bidders are currently participating in the sale process.
"We anticipate that a bidder will be selected and formal documentation entered into around the end of the first quarter of 2012.
"Once final documentation is agreed with the purchaser, the process of obtaining approvals of the transfers throughout the ECCU and in The Bahamas will commence. This is the final phase of the process of selling BAICO’s traditional business," they stated.
The ECCU Governments also said that they have continued to do the necessary work in identifying the possibility of providing assistance to BAICO’s policyholders in the ECCU who have non-traditional policies, such as Executive Flexible Premium Annuities (EFPA).
They went on to explain that litigation in Trinidad and Tobago by BAICO against CL Financial is continuing for the recovery of a US$49.5M debt owed by CL Financial to BAICO.
They continued: "Importantly, BAICO has also commenced litigation in the United States by filing a complaint against BAICO’s former directors for alleged breach of their fiduciary duties by entering into a series of speculative real estate investments in the United States which caused harm to BAICO including rendering it insolvent.
The complaint also includes claims against other parties connected with the real estate transaction. Some of the former directors being sued include Lawrence Duprey and Brian Brancker."
The ECCU/BAICO Health Insurance Support Fund that was established by the ECCU Governments to meet BAICO’s obligations to claimants under Health Insurance policies, closed for applications on December 31, 2011 after some seven months of operation.
According to the ECCU Governments, the Fund received over 1 300 applications for assistance and is expected to pay out in excess of EC$3M to health insurance policyholders.
Clico International Life Insurance Company
On April 14, 2011, Deloitte Consulting Ltd. (Deloitte) was appointed as Judicial Manager of CIL’s head office operations in Barbados.
Deloitte has also been appointed as Judicial Manager of CIL’s branches in Grenada, St. Vincent, Dominica, Antigua and Anguilla while Richard Surage was appointed as Judicial Manager of CIL’s St. Lucia branch and Omax Gardner was appointed as Judicial Manager of CIL’s St. Kitts & Nevis branch.
According to the ECCU Governments a press release dated January 27, 2012, the Judicial Manager of CLICO International Life Insurance Limited reported that the first stage of the investor identification process for the Company is now well underway.
"The release said that the objective of this process is to identify an investor with depth of management and the financial capacity necessary to provide greater confidence to policyholders and regulators as it relates to the viability of any new entity which may emerge from the existing operations of CIL.
"During this first stage, several expressions of interest in CIL were received from local, regional and international investors and it is expected that other expressions would be forthcoming. The Judicial Manager will seek to conclude negotiations with one of the interested parties within the next five to six months, subject to necessary Court and regulatory approvals," the ECCU Governments stated.
The Governments also stated that based on the results of the concluded forensic audit, a recommended course of action will be made by the Judicial Manager during its next update to the High Court of Barbados in later this month.
The ECCU Governments while expressing appreciation to the citizens of the region for their patience, promised to continue to work steadfastly in identifying solutions for individuals and institutions affected by the BAICO and CLICO situation.
They also promised to provide updates as developments occur.
