Traditional Life fund to be capitalized

Holders of traditional life insurance policies with the now troubled British American Company (BAICO) and Colonial Life Insurance Company (CLICO) can expect to see developments soon.{{more}}

Speaking in Parliament last Thursday, Prime Minister Dr. Ralph Gonsalves said that a decision had been taken by the Heads of the Eastern Caribbean Currency Union (ECCU) to capitalize the traditional life fund through the sale of the existing policies to another life insurance company.

Gonsalves said that in the same way a decision had been taken to set up a medical insurance fund, so too, the sum of US$38 million will capitalize the traditional life fund.

The measure is expected to take care of the 22,000 policy holders across the currency union and the 4,100 or so policy holders in St. Vincent and the Grenadines.

The prime minister, who was also speaking in the capacity of the chair of the subcommittee of the Monetary Council on insurance, said that advertisements are expected to begin appearing in the local press this week or next week for the sale of thr traditional life policies, as they are seeking life insurance companies to bid and pre-qualify.

“We want this to be open and transparent,” Gonsalves said.

He added that this work was at a very critical stage and that there was already a lot of technical preparatory work done, including data collection by the committee which advises him.

The funds are being drawn from the US$50 million secured from the Patrick Manning administration, Gonsalves explained.

The funds were usually utilized by the six independent countries of the Organisation of Eastern Caribbean States (OECS) to capitalize projects in each territory, the prime minister further explained.

But an agreement was reached that the money will be used for nothing other than stabilizing and assisting BAICO.

The Prime Minister explained that this approach was the one taken to address the issue after the new administration in Trinidad and Tobago decided not to go with a plan to set up a new company with various components capitalizing that company.

Gonsalves further noted that, after numerous pieces of correspondence with Trinidad and Tobago’s Prime Minister Kamla Persad-Bissessar, she had asked for some time, as she was currently looking over the situation before seeking a solution on the matter.