Saturday, 10 November 2012 02:30
By press release
Antigua St. john's - The Governments of the Eastern Caribbean Currency Union and the Judicial Managers of of British American Insurance Company or BAICO have just issued the following update on the situation involving the failed CLICO subsidiary, whose collapse handed staggering financial losses to hundreds of Antiguans and Barbudans.
Below is the text of the update:
On June 29, 2012 the Governments of the Eastern Caribbean Currency Union (the “ECCU Governments”) and the Judicial Managers of BAICO announced that:
British-American Insurance Company Limited (In Judicial Management) (“BAICO”) has entered into an agreement to sell part of its insurance business to Sagicor Life, Inc (“Sagicor”); and the ECCU Governments have undertaken to provide funding of up to US$38 million to assist in restoring value to the transferring policies.
At the time of that announcement the parties estimated that completion of the sale would take 4-6 months.
Due to a lengthier than expected process to finalize the Scheme document in The Bahamas, and also an extensive exercise to bring all policy records up to date, the parties now anticipate that the sale will be completed during the first quarter of 2013.BACKGROUND
Completion of the sale
BAICO’s traditional life insurance business (the “Portfolio”) can be transferred to Sagicor once the parties have obtained all necessary approvals for the transfer from the relevant Courts and insurance regulators in The Bahamas (where BAICO is incorporated) and throughout the ECCU countries.
It is expected that the approvals for all countries will take around another three months, at which point the transfer of the business can be legally finalized.
The ECCU Governments will continue to work with Sagicor and BAICO to finalize this as soon as possible.
It is intended that the entire Portfolio for the ECCU region will be transferred at the same time. However, as a precaution, if any specific country approvals are delayed or not received by the date the parties have agreed for the transfer, it can be agreed to transfer the Portfolio over several stages, or to only transfer the parts of the Portfolio for which approval has been obtained.What should policyholders do?
Policyholders whose policies are proposed to be transferred need not take any action at this point, except to continue to pay any premiums that are due in order to maintain their policies.
We expect that policyholders will be provided with information about the proposed transfer of the Portfolio by local advertising in the coming months, as Sagicor and BAICO seek the approvals needed to transfer the Portfolio in each country.
Once the transfer is completed, Sagicor will contact individual policyholders to confirm that Sagicor has assumed obligations under the transferred policies, and policyholders will once again be able to operate their policies in accordance with the contract terms.What about policies that have lapsed?
The ECCU Governments are mindful that during the past three years, due to the uncertainty about BAICO’s future, many policyholders may have stopped paying their premiums. In many cases, this will have resulted in the lapsing of their policies.
The Governments, Sagicor and BAICO are currently considering whether it will be possible to offer to reinstate policies that have lapsed in this period. This is expected to be quite complex, and different policies will, if such a plan is progressed, be affected in different ways. Further information will be made available if a proposal is able to be implemented.Policyholder queries
Many policyholders may not be aware if their policy is current. For example, they may have ceased paying premiums some time ago, but the automatic loan feature of their policy may have been triggered, meaning essentially that the accumulated value of their policy was used to pay their premiums.
If policyholders have queries, they can contact their local BAICO branch to find out the status of their policy.Sagicor’s commitments to the ECCU region
Sagicor has agreed to set up an ECCU Consultative Committee, whose role will be to play an oversight role (including compliance, anti-money laundering, capital adequacy and corporate governance) in relation to the performance of the Portfolio; placing its ECCU business into a separate ECCU-based entity within one year after completion of the transaction; and listing the ECCU entity on the Eastern Caribbean Securities Exchange (ECSE).
We look forward to providing further updates on the progress of this process.