ECCU agrees to pay US$2m. to BA
All seems to be progressing as planned for the member states of the Eastern Caribbean Monetary Union (ECCU) to take over British American Insurance Company Limited (BA).
In what is the latest move, the ECCU countries have agreed to pay the US$2.022 million due by June 30th in re-insurance fees for properties insured by BA.{{more}}
Prime Minister and Minister of Finance Dr Ralph Gonsalves announced the decision both in parliament and at a press conference earlier this week, saying that with the hurricane season beginning, it was important that this be taken care of.
The final decision to make the payment came following a teleconference earlier this week involving Prime Ministers and Ministry of Finance officials of the Eastern Caribbean (EC).
Regarding the take over of British American, Gonsalves said that meetings are taking place in each EC territory between the insurance regulators and the Attorneys General so as to guide the process of the governments getting juridical management of BA in the individual territories.
When questioned about a time line for the new entity which will replace BA under a new name, Gonsalves could not say.
He had, on an earlier occasion said that he didnât expect it to take longer than a year.
A special meeting of the ECCU countries and Trinidad and Tobago was held in Trinidad on Monday, May 25th, with a follow up meeting of finance officials here in St Vincent two weeks ago.
As a result, a decision was taken to accept a proposal, submitted by this government, which will see the governments of the ECCU and Trinidad and Tobago take over the assets and liabilities of the insurance company, which is part of the collapsed CL Financial Empire.
At a joint meeting of the OECS Authority and the ECCB Monetary Council held here on Friday, June 19th, the issue of BA was also high on the agenda.
At every opportunity he has had to speak on the issue, whether in parliament, or at the end of the aforementioned joint meeting, Gonsalves has continually outlined the four point strategic objective the governments hope to achieve by this move.
These are: that the solutions for British American be a regional one; that a new company is formed in which British American will remain a going concern; that policy holders and investors are protected and that the British American does not constitute a systemic risk to the finance system in the ECCU.
Right now, Gonsalves explained, the search continues for consultants to advise the governments as they go forward with the plans for the insurance company.
When he spoke in parliament on the issue on Thursday, June 18th, Gonsalves explained that BA has $1.6 billion in liabilities, $190 million of which is from St Vincent and the Grenadines.
BA is between $40 million and $50 million short of what they should have in the local statutory fund.
He further explained the companyâs dilemma, where about US$400 million has been invested in real estate in the United States, which has tanked.(KJ)
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