New BAICO plan
$84.6 million bond settlement on offer for policyholders
Having already approved a restructuring plan for CLICO International Life, Government is said to be putting the finishing touches on a similar settlement for policyholders and investors in its sister insurance company, British American Insurance Company Limited (BAICO).
Barbados TODAY understands that a bond settlement of $84.6 million is in the offing under the British American Insurance Company Limited Preservation of Investment Bill, which is due to go before Parliament early in the New Year.
Once the bill has been approved, there will likely be an immediate cash payout of $2.6 million, official sources have disclosed.
However, the centrepiece of the restructuring plan for the company – which was placed under judicial management back in 2009 following the collapse of its Trinidad-based parent company, CL Financial – will be the transfer of BAICO’s life and annuity business to a “reputable insurance company” and issuance of the $84.6 million in bonds.
Sources, who have seen the full reorganization proposal, say the bond issuance will occur in four payouts over 25 years.
Barbados TODAY also understands that Sagicor Life will take over the BAICO insurance portfolio.
Once the bond arrangements are finalized, Government will accept a transfer of property assets from CLICO’s statutory fund totaling $26.6 million as a trade-off for its input into the deal, which will also see the Freundel Stuart administration covering an $8 million shortfall in the BAICO employee pension plan.
That plan currently covers 72 staff members.
At the start of the month, Minister of Finance Chris Sinckler announced that settlement was finally coming for CLICO policyholders and investors after an arduous six-year wait.
This followed the High Court’s approval of the “Barbados Plan” for CIL, in response to which Sinckler said the “cleaning up and sanitizing” would begin immediately.
Under the CIL plan, $52 million is to go towards the immediate overhaul of the company over the next year-and-a-half and $5 million to the Judicial Manager in fulfillment of CLICO’s immediate obligations.
The objective of these actions is to put CIL in a position to write business again or sell it to any buyer who makes the most reasonable offer after it has been overhauled.
That plan has received the blessing of June Fowler, chairman of the Barbados Policyholder and Investors Alliance (BIPA), who has been at the forefront of the fight for justice for policyholders since 2009.
However, it still has one hurdle to overcome: a decision by countries in the Eastern Caribbean to file an application for leave to appeal against the Barbados Plan.
With that matter still pending, sources also tell Barbados TODAY that BAICO’s Judicial Manager is due back in court in February to present his final report.