BAICO to pay out $16.2 million to policyholders in SVG by 2014

Between now and March 2014, 540 persons in St Vincent and the Grenadines who hold policies with BAICO will receive payments totalling EC$16.2 million.{{more}}

Prime Minister and Minister of Finance Dr Ralph Gonsalves made the announcement last Thursday, during a ministerial statement to Parliament.

He said these payments form the third phase of the BAICO relief programme and will be for owners and assignees of BAICO Executive Flexible Premium Annuity special edition (EFPA) or Flexible Premium Annunity (FPA II) policies issued in the currency union, which have principal balances over $30,000. Holders of Flexible Premium Annuities (FPA) issued in the currency union, which had an accumulated value at August 1, 2009, of over $30,000, will also receive payments under this phase.

The prime minister also noted that at least one of the owners of the policy must be an individual.

“If the policy has been assigned, one or more owners of the orginal policy must have been an individual, in other words, we are addressing individuals and not institutions,” he said.

Gonsalves, who has been given special responsibility by the heads of government in the East Caribbean Cuurency Union for matters relating to failed insurance giants BAICO and CLICO International Life (CIL), said details of phase three of the payout will be made public in the local newspapers.

The prime minister said policyholiders should attend their local BAICO branch before March 31, 2014 to submit applications and supporting documents.

“If all the documentation has been provided and the application is properly completed, qualifying applicants should allow up to three months for processing of a standard application. Applicants not able to attend a branch in person, may refer to the brochure for options on how to submit their applications,” he said.

The prime minister however said he is hopeful that there will be some applications which are very straight forward, and where the information is easily cross checked, where he will see some payments before Christmas.

The prime minister said in phase three, 540 policy holders in St Vincent and the Grenadines will be paid the sum of $16.2 million.

In phase one, which began in December 2012, 716 policy holders in SVG were paid EC$4.5 million. These were policyholders with a principal balance of under $30,000. These persons received payments equivalent to the amount of their policy balance as at August 1, 2009, as well as a refund of any premiums paid as of that date. The payments in phase one were made utilizing US$36 million, which was the first tranche of US$100 million which was promised by the government of Trinidad and Tobago, following the announcement in July 2012 that that country’s government had reaffirmed its commitment to providing the funds to assist BAICO policyholders.

The second phase of payments began in March this year, when another US$12 million of the US$100 milion promised by the government of Trinidad and Tobago was transferred to the relevant account at the Eastern Caribbean Central Bank. That phase saw 358 policy holders in SVG being paid EC$4.8 million. The phase two payments were made to EFPA and FPA II policyholders with balances of less than EC$30,000.

Gonsalves said the money for phase three will be paid from US$25 – US$26 million which is on hand.

He said it is anticipated that from this month, the first tranche of US$40 from the Caribbean Development Bank will be received. He said certain accompanying reforms have to be put in place, including a regional regulatory mechanism, and changes to the insurance law.

In the three phases so far, 1614 persons in St Vincent and the Grenadines will benefit a total of EC$25.5 million.