BASSETERRE, St. Kitts – THOUGH the financial woes of the defunct British American Insurance Company (BAICO) have disappeared from the headlines, government heads at the level of the Eastern Caribbean Currency Union (ECCU) are considering legal and other options to investigate individuals who may have contributed to the company’s failure.
It has been more than a year since the liquidity challenges of Trinidad-based CL Financial, parent company of Colonial Life Insurance Company (CLICO) and BAICO, were made public, and despite efforts by regional leaders to bring some closure to the matter, it is still a live concern.
According to an official communiqué issued by the ECCU last Friday (Jul. 16), the Governments are working closely with Judicial Managers to identify whether BAICO is able to recover funds from certain individuals or organisations who may have contributed to the company’s financial and other problems.
“The relevant authorities within each of the EC countries where BAICO conducted business may also need to evaluate and pursue potential criminal activity regarding BAICO...
“The ECCU Governments and the Judicial Managers all recognise the importance of ensuring that those responsible are pursued wherever feasible, and that those who contributed to the losses are required to compensate those who have suffered the brunt of them,” the release reads.
As important as this potential recovery action is in making more assets available to creditors, ECCU representatives said they are cognizant that the pursuit of both civil and criminal legal options is a long and often costly road, “inevitably punctuated by legal and other complexities, and often taking many years to resolve”.
Last year, in the early responses by the ECCU regarding the fallout of British American, the then Minister of Finance, Hon. Dr. Timothy Harris, was adamant that someone or some institution must be held responsible for leaving the region’s people at such risk exposure. That, he however noted, should be addressed after sufficient action was taken to protect regional policyholders and investors in the company.
“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,” Harris said.
Meanwhile, in the recent past, ECCU Governments have been engaging in ongoing discussions with the Judicial Managers and a strategic investor regarding the proposed establishment of a new insurance company. This company would take on some of the business of BAICO, such as the traditional life, annuity and investment business, which would in many or all cases be on reduced terms to that which policyholders had with BAICO.
Talks with the Government of Trinidad and Tobago for a contribution to help capitalise the new company, and therefore minimise the losses of policyholders, were “encouraging” but have slowed following that country’s recent elections.
The release said that the ECCU is “hopeful” that the Government of Trinidad and Tobago would be in a position to meet with representatives of the ECCU governments shortly.
