BASSETERRE, St. Kitts – SAFEGUARDING the interests of policyholders and investors in the insolvent British American Insurance Company (BAICO) remains a top priority for the Minister of Finance Hon. Dr. Timothy Harris, as he continues to plead for patience and cooperation in the matter.
Following last week’s announcement by governments of the Eastern Caribbean Currency Union (ECCU) that a new company would take the place of the collapsed insurer, Minister Harris said finding a resolution is a “complex undertaking” but hope is in sight.
Recognizing that liquidating the company would be more detrimental than beneficial to policyholders, Harris noted that protecting the investments of Kittitians and Nevisians is of paramount importance. He therefore called for patience and understanding as his ministry works assiduously to implement effective and timely solutions.
“The ECCU Governments understand the concern and anxiety of policyholders. Their anguish and trauma are real and poignant. The policyholders of British American are aware that this is a difficult and complex matter, the resolution of which demands the fullest cooperation of all.
“We must all continue to be patient. Nothing will be gained from rash, intemperate or obstructionist action,” Harris stressed.
While many calls have been made for ECCU governments to probe the cause of the demise of BAICO, Harris maintains that now is not the time to hold someone responsible but ratheris a serious time to keep policyholders at the core of his ministry’s decision-making.
“Who is responsible for this difficult situation in which we find ourselves?’ and ‘How can this be avoided in the future?’ are important questions which must and will be addressed in due course. However, the ECCU governments’ first priority in this debacle has been, and continues to be, to craft a viable and sustainable solution for its affected citizens and residents.
“No doubt, as the smoke clears, further investigations into the underlying reasons for the collapse of BAICO will likely be an important next step and once again regional cooperation will be critical,” he added.
The ECCU Governments have asked the judicial managers, who were appointed to independently assess the branches of BAICO, to make appropriate arrangements to receive feedback from policyholders and the public on the plan and to provide available information to policyholders.
At the same time, according to Harris, ministers of finance across the region have to focus on the lessons that can be learned from the BAICO collapse and its far-reaching implications.
“We can begin to learn from the lessons of this experience, both as individuals and as nations. We must relook the matter of corporate governance, so as to ensure that management suffers consequences for their reckless, ill-conceived actions and that corporate avarice is controlled,” he stated.
At the national level, enforcement of the new Insurance Act passed earlier this year is expected to provide legal and supervisory frameworks to regulate financial institutions.
At the individual level, Harris said the BAICO problems have taught the importance of investment diversification, as well as understanding the risks and associated returns on investment.
