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Furious policyholders demand answers over British American

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Angry policyholders in a collapsed insurance firm yesterday besieged the accountancy firm winding up the affairs of the company.

Around 50 policyholders in the failed British American Insurance Co went to Hamilton accountancy firm KPMG to ask for a complete breakdown of the cost of liquidating the company.

And they said they were seeking a lawyer to “go after” KPMG on the scale of the fees they charged for liquidating British American assets.

Sarah Jackson, spokeswoman for the investors, told KPMG chiefs: “We, former holders of British American policies, have come today to express our disgust and frustration with the manner in which this situation has been handled — in addition to our disgust and frustration in the manner in which we have been handled.

“All of us entered into what we thought was an honest agreement with KPMG and all of us stand here today feeling let down and robbed.”

She added: “We are certain that KPMG has received an enormous amount of money while the average hard-working policy holder now has to resort to measly cheques — some as low as only one cent.”

And Ms Jackson said: “We just want financial reports to show us exactly how much KPMG and the staff they kept on at British American were paid.”

The group went to KPMG after some investors received cheques for one or two cents as final payouts following the sale of the British American Bermuda HQ on Front Street.

Ms Jackson said: “It's unacceptable — people had policies at British American for 20 or 30 years worth thousands and thousands of dollars.

“We always asked for updates, but we have never received anything except a standard script — all we want is answers.”

She added she had invited senior KPMG accountants to a meeting of investors to be held next week.

Michael Morrison, the managing director of KPMG, who led the British American liquidation team, met the investors with colleagues in the foyer of the KPMG building in Par-la-Ville Road.

He said after the meeting that all payments to KPMG were scrutinised and approved by the Official Receiver Stephen Lowe — who appointed the firm as his agent to deal with British American — and gave copies of a report on the winding up to the protesters.

And he added that KPMG were legally obliged to hand over any compensation to policyholders — no matter how small the amount.

Mr Morrison said: “We discounted our fees significantly by 40 percent. All our fees in detail have been received by the Official Receiver and agreed by him before they have been paid.”

Mr Morrision said after the meeting: “I've been dealing with the policyholders for the last four years — there are 5,500 policyholders in Bermuda, so this is a small group.

“I deal in insolvency and it's always tough when people are losing money and particularly when individuals are affected and we certainly sympathise will all the policyholders who put their trust in British American and, in some cases, lost very considerable sums.”

He added that Bermuda investors in British American — an offshoot of a Bahamian company — had been pledged a share of any island assets of the firm due to Government policy.

But he said investors elsewhere, particularly in the eastern Caribbean, would not see the 37.5 cents in the dollar return Bermudian policyholders got.

British American collapsed in 2009 and the final payout to policyholders was made after the sale of the firm's Front Street offices, which was 40 percent owned by the island firm, with the rest held by the pension trust for the company's Bermuda workforce.

But, due to the recession, the building sale raised just over $1.62 million — around half of what was originally expected — leaving just $654,000 to be distributed among policyholders.

KPMG officials listen to British American policy holders complaints in the lobby of their offices at Crown House (photo by Glenn Tucker)
KPMG officials listen to British American policy holders complaints in the lobby of their offices at Crown House (photo by Glenn Tucker)

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Published September 20, 2013 at 9:00 am (Updated September 20, 2013 at 11:09 am)

Furious policyholders demand answers over British American

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