British American (SKN) welcomes gov’t intervention

BASSETERRE, St. Kitts – THE past six months of this year have brought much instability to the British American Insurance Company (BAICO), but a recent intervention by the Governments of the Eastern Caribbean Currency Union (ECCU) has been warmly welcomed by local management.

In mid-June 2009, the company announced that it was operating in an insolvent state resulting from liquidity challenges of its parent company, Trinidad-based CL Financial Company. By the end of June, the Eastern Caribbean Central Bank (ECCB) Monetary Council took a decision to exercise the power of intervention to ascertain the true position of the failing insurance company.

Speaking to SKNVibes, BAICO Country Manager Eugene Hamilton referenced the purpose of the intervention, stating that it should provide the appropriate information for regional governments to be more informed as to the way forward.  

Hamilton explained that during his brief stint as a BAICO Director, the Board recognised that it was no longer able to meet the financial demands of its policy holders. He informed that early discussions with Chairman of the Subcommittee responsible for the intervention, Hon. Dr. Ralph Gonsalves of St. Vincent, brought some closure to the matter.

“PM Gonsalves had outlined to us the proposal he had in mind for the restoration of British American for the benefit of the policyholders, and his plan appeared to be a very sound one which was plausible. So, we had communicated to him to inform him that we had discovered that the magnitude of the problem was beyond us as individuals or as a Board to deal with, so we wanted the governments to intervene to make decisions very quickly,” Hamilton said.

Hamilton stressed that it was necessary for the Board of Directors to resign in order to “stand aside and allow the regulators with jurisdiction over BAICO to intervene in the public good”.

“We wanted the governments to intervene to do as quickly as possible what they might be mandated or authorised or have the capacity to do. I resigned to allow government to feel that it was prudent to move quickly to intervene and see if they can deal with the situation so that the policyholders can benefit. If we continued as members of the board, while governments may still have come in at our requests, then they may not have moved very quickly,” the BAICO official stated.

Hamilton pledged that his staff would remain cooperative and would be open-minded in allowing regulators to ascertain the financial status of the company. He also pledged to make all necessary documents accessible to government’s regulators to scrutinise during the intervention.