BAF acquires British American

Mwangi Ngamate
Nov 11, 2009 (Cayman Net News - McClatchy-Tribune Information Services via COMTEX) --

BAF Insurance Company (Cayman) Limited (BAF Cayman) has taken over the management of British American Insurance Company Limited (Cayman) ("BAICO Cayman") following an agreement with the Controller-Managers from KPMG, Simon Whicker and Kris Beighton.

BAF Cayman, which started operating formally on Thursday 5 November, noted that the original BAICO Cayman staff of 15 people would be retained.

BAF Cayman is owned by BAF (Holdings) Cayman, a local company and a member of the BAF Global Group Ltd, a Bahamian company BAF Global Group CEO, Chester Cooper, told Cayman Net News it was the first time the group was venturing internationally and Cayman Islands represented the best destination for investment in the Caribbean region.

Mr Cooper noted that the company would be introducing new products based on the needs in the market, as well as continuing with the services that BAICO had.

"Our agents are working on need assessment to come up with products that can be sold in the Cayman Islands," he said.

BAF Global has a track record for acquiring and re-energising financial and insurance companies. In 2007, BAF Global acquired British American Financial Limited in the Bahamas, rebranded it and within a two-year period, transitioned it from an insurance company to a full-services financial firm.

The new chairman of BAF Cayman is Harvey Stephenson JP, a Caymanian and a 40-year insurance and banking industry veteran. He retired several years ago as head of BAICO Cayman, and has consented to return to assist in ensuring a smooth transition. He serves on various government and private sector boards, including the Cayman Islands Development Bank and the Water Authority board.

"The purchase by BAF will protect the interests of BAICO Cayman's thousands of policyholders from the threat of losing their current coverage and services," the company said in a press release.

"This really is a great result for Cayman," KPMG controller, Mr Beighton said.

"The interests of the policyholders and pension plan members will be safeguarded by this deal and the opportunity exists for a notable local business to survive and prosper and thus continue to provide employment," he noted.

"This has been an intense six weeks and this result would not have been possible without the sound commercial approach taken by BAF and the close coordination and support of the Cayman Islands Monetary Authority (CIMA), the National Pensions Office, the Health Insurance Commission, the Insurance Commission of the Bahamas and the Judicial Manager of BAICO in the Bahamas and, of course, the staff and agents of BAICO Cayman who, despite the uncertainty surrounding the business, have diligently continued to service the customers of BAICO Cayman over the past few months," Mr Beighton said in his remarks.

BAF's acquisition of BAICO Cayman has been formally approved by CIMA, the National Pensions Office, the Grand Court of the Cayman Islands and the Supreme Court of the Bahamas and supported by the Health Insurance Commission (HIC) and will take immediate effect.

Steps will be taken over the next few days to enact an orderly transfer of BAICO Cayman's business operations to BAF. Policyholders and pension plan members will be receiving formal written notification of the change of ownership in the course of the coming days.

CIMA's Managing Director, Cindy Scotland, commenting on the acquisition, stated, "This sale is a welcome development that meets the objectives that CIMA had in placing BAICO into controllership."

"It will safeguard the investments of policyholders and creditors; ensure the institution has a firm financial base with sound management and control, and preserve jobs," she noted.

"This is the best possible outcome and we look forward to a continuing proactive relationship with the new owners, in the public interest," she said.

On behalf of the National Pensions Office, the Acting Superintendent of Pensions, Amy Wolliston stated, "The National Pensions Office welcomes BAF Insurance Company (Cayman) Limited to the Cayman Islands as the new Administrator of the British American Guaranteed Pension Plan. We assure all pension members that we have worked closely with BAF over the past weeks to ensure that members' pension benefits are fully protected. The NPO looks forward to an ongoing collaborative working relationship with BAF."

The Superintendent of Health Insurance, Mervyn Conolly, said, "I look forward to working with BAF Insurance Company (Cayman) Limited to ensure that there is a smooth transition for the current BAICO health insurance policy holders, and I am optimistic that this is an opportunity for BAF Insurance Company (Cayman) Limited to establish an excellent working relationship with the other stakeholders in the health insurance industry."

"We are extremely pleased to announce that all the rights and entitlements of all existing insurance and pension clients will be protected. I find it particularly gratifying that this acquisition by BAF has protected the lives, investments and assets of our 10,000 insurance and pensions clients," Mr Stephenson, the BAF Cayman chairman noted.

The Board has appointed Jason Borrino as the managing director, who will directly oversee the company in the Cayman Islands.

Mr Borrino has a wealth of international experience, directly managing the Caribbean branches of a top five global insurance company.

He has also worked in Europe, Asia and across the Caribbean in the employee benefits arena. Additionally, he has experience in captive management, third party administration and international brokerage and has worked as a consultant to several insurance and brokerage companies in Europe, USA and the Caribbean.

Indicating the direction of the new company, Mr Borrino said, "Life insurance, health insurance and pension plans will continue to be our core business."

"In time, backed by the extensive experience and resources of the BAF Global Group, we will introduce many more exciting products and services," he said, reiterating comments by the BAF Global CEO.

"BAF Insurance Company (Cayman) Limited has expressed its commitment to making the transition a seamless one in keeping with their philosophy of providing excellent customer service and 'financial solutions for life,'" he added.

The appointment of KPMG as controllers of BAICO was done in light of the "increasing financial and operational difficulties" of the Cayman branch earlier in the year. According to an earlier press release from CIMA, there were grave problems being experienced throughout the Caribbean by the company, which is registered in the Bahamas and its parent company, CL Financial Limited of Trinidad & Tobago.

A cease and desist order was issued by CIMA on 29 June 2009 as BAICO had been unable to fully satisfy the requirements that CIMA had imposed.

The cease and desist order prohibited BAICO from issuing new policies of any kind, according to CIMA, the requirements being that BAICO bring its operations back in line with the requirements of the Insurance Law (2008 Revision).

A welcome move with the new management of the company is that the company will now issue new policies and retain the competition in the industry.

Mr Cooper said that he expected growth in the pensions business and an immediate strategy would be to build on that.

To see more of the Cayman Net News or to subscribe to the newspaper, go to
http://www.caymannetnews.com/. Copyright (c) 2009, Cayman Net News, Grand
Cayman, Cayman Islands Distributed by McClatchy-Tribune Information Services.
For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or
847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group
Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.