BASSETERRE, St Kitts, July 2, CMC – The government of the sub-regional Organisation of Eastern Caribbean States (OECS) say they have reached an agreement with the Barbados-based Sagicor Life, Inc. (Sagicor), to sell the traditional life insurance business of British American Insurance Company (BAICO).
In a statement issued at the end of their weekend meeting here, the governments said that the agreement was reached together with the court appointed BAICO judicial managers to sell the life insurance sector of the Trinidad-based financially strapped company to Sagicor, a wholly-owned subsidiary of Sagicor Financial Corporation.
The statement said that the government of the Eastern Caribbean Currency Union (ECCU) have undertaken to provide funding of up to US$38 million to assist in restoring value to the transferring policies.
The statement said that the sale was agreed after a formal sale process, which resulted in strong interest from seven parties with four final bids being considered.
The business being sold comprises group pensions and traditional life policies issued by BAICO in Anguilla, Antigua, Dominica, Grenada, Montserrat, St. Lucia, St. Kitts and Nevis and St. Vincent and the Grenadines as well as Universal Life policies, Term Life, Whole Life, Endowment and Home Service Life
Approximately 17,500 policyholders are expected to benefit from the sale, restoring the policy values for nearly two in every three BAICO policyholders.
“It should be noted that under the terms of the sale, all valid and in- force life policies as at the Scheme Effective Transfer Date will be transferred to Sagicor without any amendment or change to the respective policy, allowing policyholders to benefit from the terms they historically agreed with BAICO.
“The life insurance business will be transferred to Sagicor once all necessary approvals for the scheme of transfer from the relevant Courts and insurance regulators in The Bahamas (where BAICO is incorporated) and throughout the ECCU countries are received,” the statement said.
It said that the approvals for all countries will take a further three to six months at which point the transfer of the business can be finalised and that the governments will work with Sagicor and BAICO to finalise this as soon as possible.
“It is intended that the entire business will be transferred at the same time. However, as a precaution, if any approvals are delayed or not received within the next four months, the parties can agree to transfer the business in stages.”
Sagicor operates in 19 countries in the Caribbean as well as in the United Kingdom and the United States.
The multi-billion dollar Sagicor Financial Corporation is a listed entity in Barbados, Trinidad and Tobago and the United Kingdom.
The statement said that Sagicor has demonstrated its commitment to the ECCU by agreeing to set up an ECCU Consultative Committee, to play an oversight role in relation to the performance of the business as well as placing its ECCU business into a separate ECCU-based entity within 12 months of completion of the transaction.
In addition, the insurance company is committed to listing at least 25 per cent of the shares of the ECCU entity on the Eastern Caribbean Securities Exchange within two years of its commencement of operations.
The statement said that the ECCU governments, Sagicor and the judicial managers “are currently considering whether it will be possible to offer to reinstate policies that have lapsed in this period and further information regarding this issue will be communicated to affected policyholders prior to the completion of the transfer.”
It said that many policyholders may not be aware if their policy is current and should contact their nlocal BAICO office to find out their status.
“The sale represents an excellent outcome for traditional life policyholders, and reflects the ECCU governments’ and judicial managers’ continued efforts to work to identify solutions for individuals and institutions affected by the BAICO collapse.
“Although the sale is structured specifically to transfer the ECCU traditional life policyholders to Sagicor, the sale is also beneficial to all other policyholders and creditors of BAICO who are not covered by the terms of the sale by reducing the remaining liabilities of BAICO,” the statement added.