PM seeking help for British American Ins.

An urgent request has been made to the government of the Bahamas to save British American Bahamas from liquidation.

Last Tuesday, April 7th, at a press conference in Cabinet Room, Prime Minister Dr Ralph Gonsalves said that a letter was to be urgently dispatched to Bahamian Prime Minister Hubert Ingraham, aimed at getting assurances that the liquidation order will be revoked.{{more}}

“Though CL Financial is the ultimate owner of British American, from a juridical standpoint, the headquarters of British American Insurance Company is in the Bahamas,” the Prime Minister said.

“Whilst we are trying to put our operation in order…I don’t want any juridical intervention elsewhere to make my task, our task, more problematic,” Dr Gonsalves said.

Dr Gonsalves was at the time reporting on progress that has been made by the governments of the Eastern Caribbean Currency Union (ECCU) countries, Trinidad and Tobago and Barbados to safeguard the interest of investors in CLICO and British American in these countries.

Ministers of Finance of these territories met in Antigua last Thursday, April 2nd, to follow up on agreements that were made in a March 4th meeting in Barbados, especially in relation to the provision of liquidity support to British American Company in the Organization of Eastern Caribbean States (OECS).

At the follow-up meeting in Antigua, it was agreed that Trinidad and Tobago will provide US$50 million from the CARICOM Petroleum Fund, while Barbados will provide US$5 million and the ECCU will provide US$10 million towards this liquidity support fund.

A further US$15 million will be sought from regional and international organizations.

Dr Gonsalves said that it has been determined by regulators that British American has a liquidity need of around EC$200 million, while the company has a total liability of EC$980 million.

This liquidity support will be used to make payments of interest on investments and to investors whose policies and investments have matured.

Dr Gonsalves, who serves as the Chairman of the joint task force to coordinate and take action in the wake of the fallout from the global economic meltdown, stressed that while individual countries are coming up with national solutions to address the situation, it is important that they continue to focus on regional policies because national approaches can prove “counter-productive.”

Dr Gonsalves updated the media on steps that have been taken to address the CLICO side of the dilemma.

The Government of Barbados has made Bds$15 million available for liquidity support to CLICO Barbados, while CLICO Trinidad has TT$1.3 Billion available courtesy the Trinidad government to meet their liabilities.

Meanwhile, the Caribbean Money Market Brokers (CMMB) has been taken over by the state owned Trinidad bank, First Citizen’s Bank.

Another initiative that is being explored by the member countries of the ECCU is the formation of an Eastern Caribbean Insurance Corporation.

Dr Gonsalves said that the plan isn’t intended to muscle out the private sector, but rather to strengthen the insurance industry.

Dr Gonsalves said that the corporation will see how they can “have” those entities in the Eastern Caribbean which may be vulnerable, but worth the while to have as an ongoing concern.

It is proposed that this corporation be funded by the governments of the ECCU, social services systems like the National Insurance Services and the private sector.