The House of Parliament met on Monday, June 27th to give consideration to five main agenda items.
By press time on Monday, two Bills had been debated and passed. The Money Laundering Prevention Act was successfully amended to broaden the definition of the crime as well as the scope of law enforcement. That Bill was unanimously approved.
Much more debate took place on a Bill to establish a legal framework to continue addressing the financial fallout which follows the collapse of regional insurance giants, Colonial Life Insurance Company (CLICO) and British American Insurance Company (BAICO) in 2009.
This framework will serve the countries of the Eastern Caribbean Currency Union and The Bahamas where BAICO is registered.
The Hon Prime Minister and Minister for Finance, Dr. Roosevelt Skerrit outlined, “The Monetary Council appointed a core committee to deal with the day-to-day operational matters of the resolution of the insurance concerns while a council continues to oversee the activities.
“Among the actions which had to be taken was the appointment of judicial managers who have provided the technical guidance on the solutions which have been approved by the Monetary Council and adopted and implemented by the ECCU member states.
“Thus far, a resolution strategy for dealing with BAICO policyholders has been approved. In that regard with funds provided by the Government of Trinidad and Tobago, a number of small policyholders were paid amounts that fell due from BAICO.
“The remaining BAICO business was transferred to Sagicor Insurance but those people and institutions who invested in annuities have not recovered their investments.”
He says CLICO still remains largely unresolved.
A uniformed law was therefore determined necessary for the eight ECCU states and The Bahamas.
The Plan of Arrangement BAICO/CLICO Act of 2016 was endorsed by both sides but not before some stimulating discussion.
Both sides support the OECS Governments marked efforts to rescue as many policyholders as possible.
The Opposition voiced some dissatisfaction with what it considered inaction by regional Governments including Dominica’s.
The Hon Finance Minister advised that that is not case.
He referenced a financial commitment from the Government of Trinidad since Trinidad has taken over the assets of BAICO.
Here’s an excerpt from his statement.
“Based on our negotiations with Trinidad, the Trinidad Government agreed to give us in the OECS US $100m as part of their contribution to the resolution involving British American Insurance Company...We in the OECS paid millions of dollars to persons who had invested in British American Insurance Company and every person who invested $30,000 or less got paid in full [thanks] to our efforts as the OECS. The records will show that these persons who invested $30,000 were in the majority.
“There were public announcements; every Minister of Finance in the OECS gave an update as to [our progress] including the Minister of Finance of Dominica. We have to understand the complexity of this arrangement. It is not the Government who can say to [them] to pay out. It is the courts. The decision to pay out resides solely with the courts of those separate jurisdictions. That’s why they appointed a Judicial Manager who is not answerable to me as the Minister for Finance or Prime Minister Ralph Gonsalves in St. Vincent. They were not appointed by us. So it is the courts that will determine what happens with the assets of BAICO and CLICO.
“As Governments, recognising the impact that this has had on citizens of our countries, we have gotten involved in an extraordinary manner because it is not the first time that people have invested and lost money. It happens every day.”
He added that the OECS Governments have threatened to sue Barbados and Trinidad who hold the assets CLICO and BAICO respectively.
The Monetary Council ultimately determined that it would be better to first use resources to give policyholders some ease.
As a matter of fact, he says, regional Governments ought to be commended for getting involved in this way.
On the subject of the devastating losses suffered by Dominicans through the crash of these insurance companies, Hon Dr. Skerrit advised, “Any investment scheme which offers you more than the banks, 6% or up, stay away from these.”
He says however regional Governments are leaving no stone unturned to recoup as much of the loss as possible.
Meantime, according to the Hon Minister for Tourism and Urban Renewal, Senator Robert Tonge, new legislation in 2012 now provides some level of protection to policyholders.
“Over 40% of the premiums that [the insurance companies] collect on an annual basis are put in [a fund]. The insurance regulators go a step further: during the period of insurance, you may have outstanding claims which are also placed in the insurance fund so that if the insurance company goes broke... the regulators can use those funds to pay out to another company which can take over your unearned premiums and outstanding claims.
“I am aware that on an annual basis, the insurance regulators of Dominica got to all the insurance companies to ensure that the outstanding claims and unearned premiums are placed and are available,” he reported.
He went on to say that those funds are kept in Dominica.
Newcomer, Hon Member of Parliament for the Soufriere Constituency, Denise Charles, was also sworn in on Monday.