The establishment of NEWCO, the company to deal with matters relating to British American Insurance Co (BAICO), has been temporarily put on hold, pending the new Trinidad and Tobago government’s definitive position.{{more}}

On November 2, 2009, the governments of the Eastern Caribbean Currency Union (ECCU) announced a strategy to deal with matters dealing with BAICO.

That new company, which was expected to have an asset base of USD 268.6 million, was expected to offer new policies to former BAICO policy holders with voluntary acceptance.

Of the total asset base, the Eastern Caribbean governments were expected to put in USD 75 million; the petroleum development fund, USD 48.6 million; government of Barbados USD 5 million; USD 40 million from a strategic investor and USD 100 million from the government of Trinidad and Tobago.

Responding to a question posed by the Leader of the Opposition Arnhim Eustace in the House of Assembly on Monday, October 25, Prime Minister Dr Ralph Gonsalves said that negotiations were going well up until April this year when the general elections were called in Trinidad and Tobago.

“The focus has now moved to the status of funding from the government of Trinidad and Tobago,” Gonsalves said, adding that future negotiations were dependent on the availability of the funds from that country.

“The setting up of NEWCO is in the Currency Union’s best hope for protection against policy losses. However, it is not a viable proposition without the original capital injection, particularly the $100 million from the government of Trinidad and Tobago,” he further explained.

“Because this is not an easy problem, the preference is still for NEWCO, but until we know what is the clear position of the government of Trinidad and Tobago, we cannot proceed with NEWCO.”

Gonsalves said that since the May 24, 2010, elections in Trinidad and Tobago, he has been in contact with that country’s new Minister of Finance, Winston Dookeran, who had indicated that he would like the technical teams of both sides to work together.

In the mean time, the financial situation of BA is becoming more precarious, the Prime Minister indicated.

Some 22,000 policy holders are life insurance policyholders, and according to Gonsalves, these “should be easy to hive off” as other companies have shown an interest in buying these policies.

But the problem was for the other 11,000 or so policy holders of other kinds of investments, which included annuities, Gonsalves said.

“This is not a simple matter, and we very much require the assistance of Trinidad and Tobago,” Gonsalves opined.

“It is important to have a regional solution,” he added.

“I assure policy holders that we are doing our best, but this is not an easy problem to resolve. If we proceed without Trinidad and Tobago and use litigation, then it is going to take a long time,” Gonsalves explained. (DD)