CIMA tells British American to stop issuing policies

(CNS): The Cayman Islands Monetary Authority has issued a cease and desist order to British American Insurance Company Limited, publicly known as BAICO, prohibiting BAICO from issuing any new insurance policies of any kind. BAICO is part of the collapsed regional firm CL Financial which also owns CLICO. CIMA stated that the order significantly expands BAICO’s reporting requirements and directs it to maintain all assets in the Cayman Islands to ensure the satisfactory coverage of all policy holder liabilities and prohibits the company from transferring any of its assets without the Authority’s approval.

The order states that BAICO is to, “maintain at all times an adequate asset level in its Trust as required by section 7(1) of the [Insurance] Law.” (Section 7(1) of the law requires an insurer carrying on domestic business to place and maintain on trust sufficient funds to meets its policyholder liabilities as determined by an actuary.” CIMA has also asked the company to submit specific information on its policies namely health insurance, policies with investment features, life insurance, pension and annuity, property, personal accident and any other policies in its remit

CIMA explained that it has issued this cease and desist order to safeguard the public interest and to protect the Company’s policyholders while the Authority continues its examination of BAICO’s affairs. The Authority also said that it expects BAICO to continue to honour its obligations to its policyholders as the ongoing examination of the Company by the Authority does not preclude the Company from honouring these obligations.

 “The situation with BAICO is an ongoing matter and, as such, the Authority is restricted in its ability to provide any additional details on the matter to the public at this time. CIMA will provide further updates to the public as and when it is in a position to do so,” CIMA stated in a release.

However, BAICO a long standing financial institution in the region and is reportedly on the brink of collapse and last week governments in the /Eastern Caribbean region met to examine their risk exposure regarding the firm. The Eastern Caribbean Central Bank (ECCB) Monetary Council has sought legal counsel in order to protect the interests of regional stakeholders from further risk posed by what was described as the insolvent insurance company. British American Insurance Co Ltd began operations in the Cayman Islands some 46 years ago back in 1963.