Gov’t to sue bank over failed insurance company

KINGSTOWN, St. Vincent – The government here is taking practical steps to recapture investments by citizens and local companies jeopardised by the collapse of British American Insurance Co. Ltd (BAICO), and its parent company CL Financing.

Prime Minister Dr. Ralph Gonsalves told Parliament on Monday that the Registrar of Insurance has instructed lawyers to put in court a commercial bank here, “which had held out that it was in a fiduciary position in relation to certain assets” from the failed entities.

Gonsalves, as in August 2011 when he first made the announcement, did not name the bank but said that the claim for EC$140 million (US$56 million) was not against the Bank of St. Vincent and the Grenadines, of which the state is a major shareholder.

“It had taken a while for the statement of claim to be settled. I was advised on Friday that very shortly that statement of claim will be filed, a pre-action letter has already been sent,” he told lawmakers while responding to a question from Opposition Leader Arnhim Eustace.

Gonsalves noted that judicial managers of the failed BAICO have sued several individuals in Miami in relation to US$75 million (US$27.8 million) arising from the Green Bay Property transaction.

He noted that while the Troubled Asset Relief Programme in the United States was 1 per cent of that country’s GDP, “… the meltdown for British American, CLICO amounts to liabilities of close to 16 per cent of our GDP”.

“If we had a 1 per cent GDP problem, it would have been difficult but not a challenge to the extent that this one is. And again, I ask for persons to have patience with us. This is a deeply involved issue and there are many twist and turns,” he said, noting that some Vincentian entities have invested as much as EC$13 million (US$4.8 million) in the failed enterprises.

“And I appreciate that many persons, especially those who have had their annuities, are suffering, finding it very difficult because of the meltdown of British American, CLICO.

“Mr. Speaker, I use sometimes that you can’t get words more powerful in our Caribbean [than] Colonial Life, the word ‘colonial’; British-American. When you have those three combining, and if you put a dash of something else along to it – I don’t want to say what that dash is – they are very powerful words; can lead you to buy anything so,” Gonsalves said.

18,700 policyholders to benefit

Meanwhile, in a ministerial statement to Parliament, Gonsalves said 18,700 — or two-thirds of BAICO’s policyholders in the Eastern Caribbean Currency Union (ECCU) — would benefit from the capitalisation and sale of the traditional insurance business.

This figure includes 3,515 Vincentian policyholders; 4,725 Grenadians; 3,960 Kittitians; 3,321 St. Lucians; 1,706 Antiguans; 954 Dominicans; 368 Anguillans, and 127 Montserratians.

Gonsalves said that “a significant number” of the 2,700 policies across the ECCU “would have elapsed because of the uncertainties” surrounding the companies.

“So it is only fair that we seek to have the resources available to say to those persons … ‘If you pay up your outstanding premiums and interest for that particular period, a new entity is buying so that you would not have lost’, I suspect that individuals would decide as to how they would do it,” he said.

He, however, added that it would be difficult to find out which policies have lapsed because of uncertainty.

Cabinet decisions

Gonsalves further said that he last Wednesday updated his cabinet on the progress for the recapitalisation and sale of BAICO’s traditional insurance business.

Cabinet authorised him, as Minister of Finance, to sign the deed of delegation and appointment on behalf o the government.

The cabinet also directed the Attorney General to advise on the steps that may be required to effect the deed, and authorised the waiver of taxes and other government charges payable on the transaction.

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4 thoughts on “Gov’t to sue bank over failed insurance company

  1. I applaud every effort made in trying to have policyholders recover their assets, but can we afford to believe anything that Ralph Evil Gonsalves says or does? He is is ‘jumping about’ this thing to create the impression that he is making an effort to assist affected policyholders. But the truth is, had he been less sloppy and more vigilant in observing certain protocols in relation to business with the Insurance Company in the initial stages, we would not have been in this mess. Evil acts like he knows everything, but time has proven that he knows little. This behaviour is typical of the devil and his demons – counterfeits they all are. Vincentians ALL, watch it with Ralph Gonsalves. He is an evil man. He cannot be trusted.

    I am not a Ralph-hater. I love him as God’s creation but the things he does are unloveable.

    Posted by justice | March 27, 2012, 11:19
  2. JUSTICE, go and take your MEDICATION.

    Posted by VINCY POWA (@VINCYPOWA) | March 28, 2012, 10:40
    • Standard stupid response by VP. Tells more about the writer than anyone can imagine. Same stupidity that is expressed in the IslandMix forums.

      Posted by Jane | March 28, 2012, 21:51
  3. The people who are owed money should group together and take a class action against the government, you may have a good case, they failed you.

    It would also be useful if we knew how much the owners of the companies had donated to the ULP before they went broke.

    As for you VINCYPOWER keep taking your haemorrhoid medication, yes you put the pessaries in your ears and up your nostrils. Who on earth do you think you are, you turd.

    Justice, your post is somewhere near the truth, that’s why VINCYPOWA attacks you. His paid job is to protect Gonsalves and the ULP from the truth that may damage them.

    Posted by Peter | March 29, 2012, 13:19

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