Government Takes Over British American

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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.

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