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Break up of Barbados’s troubled BAICO continuing

Published on March 13, 2012 by   ·   No Comments

The transfer of the final and largest part of British American Insurance Company’s (BAICO) Barbados business to another entity is to begin soon, with the entire process completed by yearend.

The update on efforts to transfer the life and flexible premium annuity (FPA) policies came yesterday from judicial manager David Holukoff of accounting firm KPMG, although he did not disclose the identity of the company that is proposing to take over the business.

“If an agreement could be successfully reached, there would be some announcements of what a specific transfer agreement meant to policyholders and, subject to the court’s approval, a staged completion during the year,” he said in an interview with the WEEKEND NATION.

“The actuaries have been preparing models under different scenarios on the specifics of how a proposed transaction would occur. A proposed transaction would likely see information and announcements going out to policyholders at various stages with an eventual closing after court approval and due diligence.”

Once the initial terms are finalized, the judicial manager explained, the transfer would then go through the courts for approval.

“We’ve got some pretty tight deadlines that we’re trying to work towards, and there is a series of processes taking place right now,” he added, although declining to reveal those deadlines.

Holukoff said that in a few months he would submit the next progress report to the court.

Since his last submission, the other areas of BAICO’s business – the health insurance and property portfolios – were successfully transferred to Barbados-based insurance giant Sagicor.

Under a deal reached last December, Sagicor Life took control of BAICO’s health insurance line, while Sagicor General took charge of the property coverage.

In a more recent development, all of the approximately 30 sales staff at BAICO were severed last Friday as part of the continuing judicial management process.

Meantime, over in the Eastern Caribbean where a separate effort is under way to sell BAICO’s health and life insurance businesses there, policyholders have been told they could get relief by yearend as well.

Antigua and Barbuda’s Minister of Finance and Economy Harold Lovell told parliament this week that an undisclosed number of insurance companies had already submitted bids for the purchase.

He promised that consideration was being given not only to those who could come up with the money, but also to those who have a solid track record of sound management and financial stability.

“It is anticipated that this process will be completed and the sale will be finalized before the end of this year,” Lovell said.

There has, however, been no such promise for FPA policyholders who bore the brunt of losses occasioned by BAICO’s collapse.

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