BAICO policyholders a step closer with transfer
POLICYHOLDERS of the failed British American Insurance Company (BAICO) Barbados Ltd. are another step closer to getting their funds back.
Yesterday in the Upper Chamber, Senators approved funds to facilitate the transfer of the life insurance business of BAICO (Barbados) Ltd. to Sagicor Life Inc. These legislative amendments are a part of Government’s rescue plan to bail out BAICO policyholders and employees who have been anxiously awaiting closure on the matter.
Leading off the debate yesterday afternoon was Senator Dr. Esther Byer-Suckoo, who alluded to the debate in the Upper Chamber last Wednesday night on the BAICO Preservation of Investments Amendment Bill 2018, now Act, where it was approved that Government should issue bonds.
“We approved that the government of Barbados should issue bonds not exceeding in aggregate the sum of 93.2 million to Sagicor Life Inc., a company incorporated under the Companies Act. Those bonds would be to facilitate the transfer of the life insurance business of BAICO to Sagicor.
“What we also did, was agreed that the Government should provide financial assistance to Sagicor in order to facilitate the preservation of the pension plans of 72 employees also of British American,” she said.
The Senator stated that in amending Section 6 of the original act of 2016, it was agreed that the government of Barbados shall by resolution of both Houses of Parliament issue six promissory notes of varying maturities, from five to 30 years, not exceeding in aggregate the sum of 8.5 million to Sagicor Life in order to assist that company with the preservation of the pension plan of the 72 employees.
“This matter before us today (yesterday), the resolution, is exactly the resolution that have spoken to in the Act that we did last week. That is for the government of Barbados to issue bonds not exceeding in aggregate the sum of 93.2 million.”
Outlining the Act before the House, the senator explained that those bonds should be drawn in four series of 23. 3 million each. The first series would have interest payment at the end of the term. Interest rate of 7.75 per cent with a maturity date of ten years from the deemed date of allotment with 7.75 per cent yield of maturity. The second also 23.3 million with the interest payment at the end of the term at 8.15 per cent, maturing at 15 years from the deemed date of allotment with 8.15 per cent yield on maturity.
The Senator explained that the third would include semi-annual interest payment and an interest rate of 8.55 per cent maturing 20 years from the deemed date of allotment and the yield on maturity of 8.55 per cent. The fourth in the series would be also interest payment semi-annually at an interest rate of 8.95 per cent and a maturity date of 25 years from the deemed date of allotment.
“This is hopefully bringing us closer to the end of a situation that has seen Government getting very involved in the affairs of the insurance business to ensure that as much as possible we could protect Barbadian citizens who had investment and Barbadians who had worked at this company.”
Noting that like with CLICO there have been calls for a speedy conclusion of this long-standing matter, she said this matter needed some in-depth analysis to determine how much would have to be paid and how Government could afford to assist.
“We all know the economic situation and financial situation that we have also been facing and a lot of other things that have had to happen in Barbados in the ensuing period, but it was important that we tried as much as possible to be able to also to address this.
“This matter of 93.2 million at a time like this is not money to sneeze and we can think of a lot of ways that we can use 93 million dollars right now. But as I said it was important that we did look after the Barbadians involved in this... Again, we mentioned there were 72 employees whose pension plans were also tied up in this matter.”
Byer-Suckoo stressed that that this recent action will not bring the matter to a full conclusion since there is still another matter to be tidied up in Parliament.
“There is still as I mentioned earlier in the legislation that we passed, there is the matter of the resolution for the six promissory notes. We have agreed in the legislation last week that the Government will issue those six promissory notes, but that there is that resolution that also has to be agreed to by both Houses of Parliament,” she said.
The Senators will meet tomorrow in the Upper Chamber at 11 a.m. (JH)