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Holders of FPAs with BAICO to begin receiving payments

Holders of FPAs with BAICO to begin receiving payments

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Approximately EC$8 million will be paid out to 1,327 holders of Flexible Premium Annuities (FPA) with the British American Insurance Company (BAICO) in St Vincent and the Grenadines, beginning December 10.{{more}}

At a press conference on Monday, Prime Minister Dr Ralph Gonsalves said 10,800 people throughout the Eastern Caribbean who put their money in the company’s annuity policies will begin receiving payments next month.

He said the governments of the Eastern Caribbean Currency Union (ECCU) were successful in getting a resolution to this matter and the first phase of the Policyholders Relief Programme will commence on December 3 in Antigua and Barbuda.

Payment is expected to commence in St Vincent and the Grenadines on December 10 and will continue until December 12 at the compound of the National Insurance Services (NIS).

“Our work has been to try to resolve this,” Gonsalves told members of the media.

He explained that it was for this reason that he led discussions with the government of Trinidad and Tobago in his capacity as chairman of the insurance committee of the currency union to provide US$100 million to assist in resolving the difficulties regarding the annuities.

Under the first phase of the payout programme, Flexible Premium Annuity (FPA) Policyholders with a principle balance of under $30,000 will receive payment equivalent to the amount of their policy balance as at August 1, 2009, as well as a refund of any premiums paid as of that date.

“You may recall two or three months ago when I had said that there would be a relief programme for the policyholders; well, we are going to have this relief in three phases,” the prime minister said.

“Finally we are seeing some money coming to BAICO policyholders,” Gonsalves said.

The reimbursement is expected to take care of the 5,200 FPA’s across the currency union and more than half of the 2,527 affected Vincentian policyholders with annuities.

These payments will be made utilizing the first tranche of the US$100 million which was promised by the government of Trinidad and Tobago, following the announcement in July this year that that country’s government had reaffirmed its commitment to providing the funds to assist BAICO policyholders.

“We express our appreciation to the government and people of Trinidad and Tobago for making these funds available, thus making a long awaited relief to the long suffering policyholders of BAICO in the currency union,” Gonsalves said.

On Monday, Gonsalves said that US$36 million had been delivered.

Payment in the remaining two phases is expected to commence as soon as the remaining US$64 million is received Gonsalves said.

These phases will cover payments for Executive Flexible Premium Annuity Policies and Flexible Premium Annuity II Policies.

Phase two is expected to take care of 3,300 policyholders throughout the currency union and phase three will compensate 2,300, he explained.

The bulk of the affected persons in St Vincent and the Grenadines have investments under $30,000, and will be taken care of in phase 1, he said. However, holders of FPAs which exceeded EC$30,000 at August 1, 2009 will not receive their payment until around the first quarter of 2013.

Local policyholders with balances in excess of $150,000 number 186, totalling EC$101.7 million, Gonsalves said.

There are 130 individuals with investments between EC$150,000 to $500,000; 27 individuals with investments between $500,000 and $1 million; and 29 individuals with investments of over $1 million.

This most recent relief effort comes in the wake of settlements of BAICO’s property insurance; then the BAICO health insurance fund was established, which saw 6,700 policyholders being paid EC$3.5 million.

In June, it was announced that, after an extensive bidding process, SAGICOR took over the life insurance business which was capitalized by US$50 million secured from discussions held with then Prime Minister of Trinidad and Tobago Patrick Manning. (please see page 27 for more information) (DD)

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