BASSETERRE, St. Kitts – JUDICIAL Manager Lisa Taylor of the accounting firm KPMG, which is investigating the works of British American Insurance Company Ltd. (St. Kitts and Nevis), has been given the green light to transfer the business of the local branch to a new company.
This decision was made on December 4 after a court hearing in the matter, presided over by His Lordship Justice Francis Belle. The ruling, made public through a parliamentary announcement by Minister of Finance Hon. Dr. Timothy Harris, allowed for the implementation of recommendations contained in section 8 of the report of the Judicial Manager filed on October 30 2009.
The report had initially called for the transfer of BAICO’s OECS property portfolio to a new entity and for a new company to be established to take over the annuities, life and health policies of BAICO OECS branches.
Commenting on the ruling during Thursday’s (Dec. 10) Parliament sitting, Dr. Harris said, “The effect of this is that the Judicial Manager is now legally authorized to implement her recommendations, which inter alia calls for the transfer of the business of the Branch to a new company and to consummate the sale of the property insurance portfolio of the branch to another established insurance company in conjunction with the proposed sale of the property insurance portfolios of other branches within the Eastern Caribbean.”
In a November 5 sitting of Parliament, Harris informed that the judicial manager’s report was filed in the High Court on October 30, outlining a number of proposals that would address the turbulence the insurer had been faced with during the past year. He explained that the proposals could not have been acted upon without the approval of the High Court.
Thanks to the work of the Ministerial Subcommittee on Insurance, the Monetary Council of the Eastern Caribbean Central Bank (ECCB) and of KPMG, the efforts toward an appropriate and timely resolution are “advancing steadily”, said Harris.
“There is reason for hope even as we acknowledge that this has been a dark chapter in the annals of our insurance sector. I spare a thought and prayer for all affected policyholders, investors and creditors of BAICO whose financial situation must have been exacerbated by the colossal failure of BAICO.
“I give every assurance that I, as Minister of Finance and Member of the Ministerial Committee on Insurance, share your concerns, anxiety and despair. But I am confident that the Monetary Council has engaged the best possible minds and support to try to salvage what has been an extremely difficult situation,” Harris said, noting his concern for protecting the interests of policyholders.
Regulators have been committed to avoid liquidation of the company, as it would mean policyholders would not receive their full payments. Conversely, the new entity is expected to offer policyholders and investors the potential for recovery of a greater portion of their assets and investments.
Policyholders are asked to be patient as much work remains to be done. The Ministerial Committee has placed its optimism on record as the governments of the OECS wish to see the new company set up within six months of Court approval of the plan.
