BASSETERRE, St. Kitts – SINCE news of British American’s liquidity difficulties caused unprecedented panic among its depositors, the company has instituted a waiting period and priority list to prevent further strain on its cash reserves.
The insurer suffered severe negative spinoff in early January when its parent company, the CL Financial Group based in Trinidad and Tobago, faced challenges in liquidating its assets, which resulted in the Central Bank in that country moving to take over a number of its subsidiaries.
Since then, there have been countless panicked rumours of depositors being denied the opportunity to withdraw their funds from the St. Kitts-Nevis branches. However, in an exclusive interview with SKNVibes, Country Manger Eugene Hamilton contended that the company has still been tending to claims.
He noted that although that there is a period in which individuals are asked to wait as the institution continues to grapple with available resources to meet such demands, all client requests are being paid in full.
“As far as I am aware, there has not been any client who has been turned back. We accept all claims from policy holders and they go through the usual framework to be processed.
They are processed according to the nature of the claim; interest payments and maturity get the priority, as there is an unusual demand on British American for these. In such cases, we have to make sure that we act prudently so that policy makers can be safe.
“The company is considering all claims in the order that they come due, and encourage everyone not to make precipitous surrenders of policy that put pressure on the company’ s liquidity. We will be responding to all our customers in a timely manner based on the availability of our resources. Caribbean governments have been trying hard to resolve the problems and I’m confident that an appropriate solution would be found,” Hamilton said.
According to a March 16 press release, due to “overwhelming requests to surrender policies”, British American has prioritized its cash payments. Interest payments have been given top priority, followed by death, health and property claims. Matured policies and surrenders have been given fourth and fifth priority statuses, respectively.
The release informed that the company aims to have matured policies paid within three months from the due date and noted that, in the interim, the policy shall continue to accrue interest for the holder’s benefit.
Management encouraged its clients to be patient and understanding as it is “currently implementing initiatives geared towards raising cash from our assets in order to fulfil our responsibilities to our valued clients”.
In February, Minister of Finance, International Trade and Commerce Dr. Hon. Timothy Harris had discussions with representatives from the World Bank and the International Finance Corporation regarding technical assistance that would ensure local depositors who may be exposed to this situation have the problem resolved in their favour.
In his Parliament address last week, Harris once again called for calm as he stressed that the government is working diligently at both the domestic and regional levels to return the situation to normalcy.
“An increasing number of persons are coming to the government for answers, comfort and assurances after failing to receive such from branch representatives/agents in our jurisdictions. I again appeal to these representatives and agents to do their best to satisfy the informational needs of all their clients, and to seek professional help in devising their information strategy and action plan. In this regard, we are appealing to those who are exposed to be patient, calm and resolute as we work through this very difficult and complex situation to restore normality to the insurance sector.
“Depositors and policy holders should maintain direct communication with representatives of the local branches...to obtain regular updates on the status of their investments and policies,” Harris advised.
Earlier this month, the Government of Trinidad and Tobago recommended that consideration be given to tapping the Trinidad and Tobago/CARICOM Petroleum Fund for a short-term response to the British American liquidity problem.
At the local level, last Wednesday (Mar. 25) saw the Nevis Island Administration and the Federal Government hold high-level discussions on the way forward in response to the financial crisis.
A Joint Task Force with representatives from both Cabinets was established from those discussions, and was charged with advising the joint Cabinet on all matters pertinent to an orderly resolution.
