Commercial bank facing legal action

Legal action is expected to be brought against one of this country’s commercial banks.{{more}}

The suit is being brought against the commercial bank in relation to its involvement in the British American Insurance Company Ltd (BAICO) fiasco.

The information was disclosed by Prime Minister Dr Ralph Gonsalves during the meeting of Parliament on August 11.

Gonsalves did not reveal the name of the bank, except to say that it was not the Bank of St Vincent and the Grenadines, formerly the National Commercial Bank.

According to the Prime Minister, this country’s judicial manager Brian Glasgow and Supervisor of Insurance Maurice Edwards have given instructions to bring legal action against a commercial bank here.

The action is being taken in relation to a matter of EC$140.547 million to which the commercial bank from 1996 had accepted to act as trustee to satisfy the statutory requirements in relation to the statutory fund.

The Prime Minister said that part of bank’s duties included reporting to the register of insurers all assets it held in trust for BAICO St Vincent; safely keep the BAICO assets and monitor and update records on the release and renewal of the assets.

He added that after the unraveling of BAICO’s parent company Colonial Life Insurance Company (CLICO) began in early 2009, the insurance supervisor acted responsibly in requesting an update of the list of assets.

The bank told Edwards that BAICO’s assets to be held in trust was EC$140.547 million for the fulfillment of BAICO statutory fund obligations.

However, according to the Prime Minister, there was reason for legal action, including breach of statutory duty, breach of fiduciary duties, misrepresentation and negligence.

Local policy holders were expected to benefit from any monies recovered from the proposed legal action the prime minister explained. (DD)