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BAICO policyholders relieved


Tue, Jul 17. 2012

More than 20,000 persons throughout the Eastern Caribbean who hold traditional life insurance policies issued by British American Insurance Co. (BAICO), their families and dependents are breathing a tremendous sigh of relief, following the news that their policies have been taken over in full by regional insurance giant Sagicor Ltd.{{more}}

The announcement of this and the subsequent reaffirmation by the Government of Trinidad and Tobago that it would contribute US$100 million towards the recapitalization and compensation efforts were made by Vincentian Prime Minister Dr Ralph Gonsalves. The Vincentian leader described these developments as representing “a major breakthrough”, paving the way for insurance claims of some 22,000 policy-holders to be honoured and payment to an estimated 80 per cent of annuitants.

Relief is perhaps a mild term for the emotion which must have been felt by the policy-holders. They have spent almost four years undergoing torture, worrying about their investments, pensions, life savings and expected insurance benefits. But the problem was far greater than at a personal level. The scale of the losses was so big that it represented a serious threat to the economies of the countries in the Eastern Caribbean Currency Union (ECCU).

Gloom and despair soon set in and herculean efforts were needed to rescue the situation. Many, policy-holders and political leaders alike virtually gave up, seeing no hope of resolution. But PM Gonsalves and his colleagues in the ECCU stood firm, resolutely and painstakingly pursuing the issue. Gonsalves himself was appointed to head two important mechanisms, a Special Task Force of the OECS and a sub-committee of the Eastern Caribbean Central Bank.

From the outset, not only did he set about his task with his customary gusto and dedication, he also infused a feeling of optimism, reminiscent of President Obama’s “Yes, we can”. That was a significant part of the equation. As long ago as November 2009,

Dr Gonsalves expressed optimism that liquidation of BAICO with a consequent loss of investments “could be averted by a set of strategies agreed by the Eastern Caribbean Currency Union”. And, even when there was an apparent about-turn by the Government of Trinidad and Tobago with regard to commitments made by its predecessor, he continued to exude confidence, saying, in July 2010, that he did not “expect the government of Trinidad and Tobago to walk away (from its commitment)”.

He has been proven right in that regard and in his dogged insistence of a regional approach to the solution, demanding that the matter be addressed at the highest levels.

There were those who tried to pour scorn on his efforts, and accused him of not doing enough to protect the interests of investors and policy-holders. They should now be magnanimous enough to at least offer their appreciation, if not praise.

The settlement represents a major achievement for PM Gonsalves and his colleagues. It demonstrates the intelligence, creativity and tenacity that we possess in these small islands. It also is a triumph for, and vindication of, regional cooperation. The government of Trinidad and Tobago too, must be congratulated for sticking to its commitment, in spite of obvious reservations.

The one sordid aspect of the whole affair is the failure up to this moment to bring to justice those responsible for jeopardizing the interests of thousands and placing the economies of the entire Eastern Caribbean at risk. Ponzi schemes operated by international criminals Lawrence Madoff and Allen Stanford brought them a combined total of over 300 years in US prisons. We are yet to see those who defrauded investors in the Caribbean, used foreign banks, including one operating here, to siphon off millions to property deals in Florida, even being detained for 300 seconds.

Resolution of the BAICO issue notwithstanding, those responsible and those who were enablers should be made to answer before a court of law.