Rescue for over 18 000 British American policyholders
BASSETERRE, St Kitts and Nevis, Thursday, April 26, 2012 – A decision taken last year to recapitalize the eastern Caribbean operations of the collapsed British American Insurance Company (BAICO) has made it more attractive to investors.
During this week’s cabinet briefing, Dr. Denzil Douglas, prime minister and minister of finance for St Kitts and Nevis, reported that the decision taken last year to pump US$30 million from the Liquidity Support Fund into recapitalising BAICO's traditional insurance business and preparing it for sale was bearing fruit.
Dr Douglas said a number of bidders had demonstrated an interest in purchasing the recapitalised portfolios of BAICO's business, and they were now being engaged with a view to concluding the sale transaction during the course of the current year.
The recapitalization decision was taken by the governments of the Eastern Caribbean Currency Union (ECCU), led by the Eastern Caribbean Central Bank (ECCB), to assist policy-holders who suffered immensely as a consequence of BAICO’s collapse.
Dr Douglas reported that 18,700 policy-holders would benefit from this important step taken by the governments of the ECCU, with St Kitts and Nevis having 3,960 beneficiaries, the second largest number of beneficiaries in any one country in the ECCU.
In assessing the kinds of insurance policies which were to be recapitalised and sold, traditional policies including whole life, endowments and term life policies were identified. However, Home Life Service, Ordinary Life and Universal Life policies have also been included, Douglas noted.
The Liquidity Support Fund derived from the CARICOM Petroleum Fund that was established by Trinidad and Tobago in 2004 to provide relief to CARICOM Member States experiencing economic hardship resulting from persistently high international prices for crude oil and petroleum products.