THERE?IS A $48.1 MILLION DIFFERENCE between the value of British American Insurance’s (BAICO) assets on its books and what the judicial manager has found.
Even more disturbing, court-appointed judicial manager David Holukoff has found the insurance company, part of the collapsed CL Financial Group in Trinidad and Tobago, had policyholder liabilities of $120.3 million as at September 30, 2010. This has resulted in a shortfall in assets of approximately $48 million.
Holukoff, a certified fraud investigator and KPMG director appointed by the local court last October, said in his 67-page, 90-day report that the insurance company’s balance sheet showed approximately $120.8 million in assets but his valuation estimated the assets to be approximately $72.7 million.
In explaining this variance, the report said the company holds some of its property investments at levels significantly higher than their realizable value when compared to a recent independent valuation from Terra Caribbean.
In addition, independent actuarial advisers Eckler Limited have found that the reserves of British American as at September 30, 2010, were insufficient.
Holukoff also had “significant concerns” regarding the values attributed to some of the company’s intragroup assets, including a loan note due from CL Financial and an amount due from parent company British American Insurance Company Limited (BAICL).
The judicial manager, according to court documents, has sought legal advice on a number of tangled issues. These relate to the priorities or the distribution of British American’s assets to its creditors.
These matters principally relate to “the existence of, access to, and the ‘reach’ of the statutory fund”.
The fact that the majority of the company’s records are held by BAICO Trinidad and Tobago has also proven to be a “significant issue”, said Holukoff.
“Whilst there are certain records held in Barbados, the detail behind the company’s assets and liabilities sits within BAICO Trinidad and Tobago.
“Whilst BAICO Trinidad and Tobago is currently continuing to cooperate with information requests, data can be slow to be obtained due to the competing demands on TT staff time. There is no guarantee this arrangement will continue in the future,” he said.