|
|
| GOVERNMENT TAKES OVER BRITISH AMERICAN |
| By Sheena Brooks |
| |
As the British American Insurance Company
sinks further into liquidity problems, Eugene Hamilton
has resigned his position as a director of the board
of the local branch while federal government announced
its assumption of control of the struggling entity.
Hamilton resigned his post as one of three directors
but remains as manager of the company now operating
under insolvency.
It was reported that Hamilton decided that it would
be in the best interest of the policyholders of British
American Insurance that he relinquish his position as
a director and allow EC island governments the opportunity
to intervene on behalf of EC island policyholders, as
had been done by the Trinidad government on behalf of
the policyholders there.
Minister of Finance Hon. Dr. Timothy Harris, when announcing
the government intervention, said the move was taken
to protect local policyholders and investors of BAICO
but that government was not in a position to take over
the company’s liabilities.
“The government of S. Kitts-Nevis has taken the
decision to exercise the Code of Intervention outlined
under Section 57 of the Insurance Act of 2009. This
act of intervention should be urgently executed according
to the 4 point plan agreed to at a special meeting of
the monetary council held on June 19 in St. Vincent.
I must make it clear that this government is not intervening
as a guarantor of the funds of depositors and investors
of British American.”
The run on BAICO and fellow CL Financial Group subsidiary
Colonial Life Insurance Company started after news broke
earlier this year that the parent company based in Trinidad
was experiencing cash flow difficulties. As the effects
began to permeate the regional branches of the insurance
subsidiaries, several governments assumed control of
their respective BAICO and CLICO branches to safeguard
the millions invested through deposits and policies.
Harris noted that the general public became aware of
the situation and began demanding refunds from both
companies, more recently so of BAICO.
“The stories are real as they are tragic of people’s
hard earned monies in jeopardy and there is uncertainty
in the public domain regarding the true state of affairs
of the company. The citizens of St. Kitts and Nevis
have been adversely affected by this situation given
that the company has a large portfolio of business in
our federation. As the general public became aware of
the difficulties experienced by the company, numerous
investors have made requests for their funds and to
date the company has been unable to satisfy the demands
of its clients for these funds.”
The referenced plan proposes that (i) the protection
of the depositors and investors shall be the first order
of business; (ii) given that the implication for the
ECCU region and given inter-related activities across
CL Financial Group and British American a regional solution
was most efficacious and should be pursued; (iii) preserving
the going concern of the insurance business was critical
and so every effort should be made to minimize systemic
risk to the ECCU”. Hamilton stated that he welcomed
the federal intervention by the government, through
the Registrar of Insurance, Kerstin Petty to guide the
company through its restoration process. |
| |
|
|
|
