Local accountants take control of British American

(CNS): The struggling, but widely used regional insurer British American Insurance Company Limited (BAICO) has been placed in the hands of accountants from the firm KPMG by the Cayman Islands Monetary Authority (CIMA) in a bid to protect the assets of the companny for policy holders. Simon Whicker and Kris Beighton who were appointed controllers on Friday have assumed immediate control of BAICO’s affairs  and are responsible for assessing the financial position and exploring various options to preserve the business including selling parts of the firm.

Whicker and Beighton who will be submitting a report to CIMA as soon as possible will continue to manage the operations of BAICO subject to the cease and desist order previously issued by CIMA on 29 June 2009 which currently precludes the issuance of any new insurance policies.

The Controllers said that the operations and coverage of the Licensee’s (BAICO) existing policies remain in effect so long as the premiums continue to be paid by policy holders. Redemptions or surrender of discretionary investment products previously issued by BAICO are now subject to review by Whicker and Beighton.

BAICO is licensed by CIMA as an approved external insurer and CIMA said the decision to appoint local controllers was taken in light of the increasing financial and operational difficulties of the Cayman branch, which reflect the grave problems being experienced throughout the Caribbean by the company (which is registered in the Bahamas) and its parent company, CL Financial Limited, of Trinidad and Tobago.

To date, BAICO has not been able to fully satisfy the requirements that CIMA imposed on it in the cease and desist order issued on 29 June 2009, and directives issued to BAICO in subsequent letters, despite CIMA extending the deadlines. The cease and desist order prohibited BAICO from issuing new policies of any kind and required the company to bring its operations back in line with the requirements of the Insurance Law (2008 Revision).

Placing the local entity into controllership will allow CIMA to ensure that there are persons in charge of the local operations who have legal power to make and execute decisions to safeguard the interests of BAICO Cayman’s creditors and policyholders and the public interest. This includes ensuring, as far as possible, that the assets belonging to the local entity, including assets held in trust, are secured for the benefit of its creditors and policyholders.

In addition to being licensed as an approved external insurer by CIMA, BAICO is registered by the Health Insurance Commission (HIC) as an approved insurer under the Health Insurance Law. BAICO also operates a Cayman Islands pension plan that is approved and registered by the National Pensions Office (NPO). Both the HIC and NPO have been briefed on the situation and are liaising with CIMA.

The operations and coverage of BAICO’s existing policies remain in effect subject to premiums on such policies continuing to be paid by policy holders. Policy holders and creditors with further enquiries may contact the controllers at Bacontroller@kpmg.ky or telephone +1 (345) 914-4402.