May 29, 2009
Govenments of ECCU to take control of British American

British American Insurance Company as we know it will soon be no more.

The company is set to be controlled by the governments of the member countries of the Eastern Caribbean Currency Union (ECCU) and Trinidad and Tobago.{{more}}

A proposal set forth by the government of St Vincent and the Grenadines, at a special meeting of the member countries of the ECCU and Trinidad and Tobago last Monday, May 25th, will see the company’s assets and liabilities taken over and the company continued under a different name.

While not going into detail, Prime Minister Dr Ralph Gonsalves told reporters during a press conference on Tuesday, May 26th, that the move is expected to cost this government US$14.3 million.

He said that the proposal, which was described by the Trinidad and Tobago’s Minister of Finance, Karen Nunez- Tesheira, as “interesting and attractive”, is geared at coming up with a long-term solution for the company.

Dr Gonsalves will head a committee that has been set up to work through the proposal, and that committee will meet here on June 5th.

He said that the proposal will also present investment opportunities for state enterprises and even the private sector.

When asked about the apprehension that some may have about governments taking over private enterprises, Dr Gonsalves said that a mixed system where the state and the private sector works together must be adapted.

He however said that some, who don’t like governments to get involved, usually run to the same governments when they are in trouble.

When British American started going through liquidity problems in January, 2009, steps were taken by the regional governments to protect investors.

A special fund was set up to ensure that the company could meet its commitment to claims made and investments that have matured. This fund included contributions from Trinidad and Tobago through the CARICOM Petroleum Fund ($50 million), Barbados ($5 million), and $10 million from the ECCU governments.

Now the governments are going further to ensure the company’s long term survival!(KJ)