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Government of the Eastern Caribbean Currency Union (ECCU) agree to create new company to deal with British American Insurance Company
by GOV.gd
Posted: Nov 4, 2009 18:54 UTC
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ST.GEORGE'S, Grenada - The Governments of the Eastern Caribbean Currency Union (ECCU) have approved a regional plan to assist in the structure and funding of a proposed new entity to take over some of the assets and liabilities of British American Insurance Company Limited (BAICO) in the Eastern Caribbean, currently under judicial management.
The plan will require the approval of the Court.
The proposed strategy was adopted to maintain continued financial stability in the region, and to protect the interests of creditors and investors, within the rules governing this process.
The new company will be capitalized by ECCU Governments, the Government of Trinidad & Tobago, the Government of Barbados, and by strategic investors. The goal in funding the new company will be primarily to cover as far as possible the principal amounts invested by ECCU policyholders and annuitants.
The ECCU Governments further endorse the recommendation of the Judicial Managers to transfer BAICO’s property insurance portfolio within the ECCU to an existing insurer, rather than including it in the assets of the proposed new company.
“The ECCU governments’ first priority has been and continues to be to craft a viable and sustainable solution for our citizens,” said Prime Minister Ralph Gonsalves of St. Vincent and the Grenadines.
In July/August of this year, regulators in the ECCU and the Bahamas intervened in the operations of BAICO and applied to the courts in several jurisdictions to appoint Judicial Managers. The courts in Antigua and Barbuda, Montserrat, St Kitts and Nevis, St Vincent and the Grenadines, Grenada, and St Lucia, where BAICO operates branches, have all issued separate orders for the firm to be placed under Judicial Management.
On 8th September 2009, the Supreme Court of The Commonwealth of The Bahamas ordered that BAICO be placed under Judicial Management. The Judicial Manager in The Bahamas than appointed an agent in Dominica to assume control of the branch there.
The Judicial Managers were all appointed from among professionals of a single group, the chartered accounting firm of KPMG.
Except for Dominica, the full reports of these Judicial Managers were filed with the respective Courts last Friday, October 30, 2009.
The findings outlined in the reports indicate the full extent of BAICO’s failure, and the wide-reaching socio-economic effects if the company is liquidated.
Earlier this year, the Monetary Council of the ECCU approved the appointment of a Ministerial Sub-Committee on Insurance to provide oversight on this matter. The Sub-Committee comprises: Prime Minister Ralph Gonsalves of St. Vincent and the Grenadines (Chairman), Prime Minister Roosevelt Skerritt of Dominica, Minister Nazim Burke of Grenada and Minister Timothy Harris of St. Kitts and Nevis. This Committee is supported by a Core Technical Team and a Committee of Regulators. All have been working diligently on this matter for several months.
The proposed new company would have its headquarters in the Eastern Caribbean and would assume the traditional life insurance, medical insurance and annuity business of British American branches in the Eastern Caribbean.
Over the next few weeks, the Governments of the ECCU will be meeting with a broad range of stakeholders to explain the proposed plan and to address their concerns and receive their views and suggestions
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