Concern mounted yesterday for clients of British American Insurance Company's Bermuda branch after the Official Receiver moved in at the firm this week.

Late on Monday, financial regulator the Bermuda Monetary Authority announced it had started winding up proceedings against the life and health insurer in the Bermuda Supreme Court.

While health insurance clients were assured they would still be covered according to their policies, life insurance clients are concerned about the money they have invested and the continuing validity of their policies.

One person seeking answers yesterday was life insurance policyholder Greer Valasse, a single mother of two and administrative assistant at law firm Appleby.

She was shocked to read in yesterday's edition of The Royal Gazette about BAICO going into receivership.

"There are so many unanswered questions," Ms Valasse said.

"I've been paying into this policy for about four years. What happens if I drop dead today? Will my children receive the benefits from the policy?

"While health insurance policyholders have been assured that they will receive the benefits of their policies, what happens to people with life insurance?

"I knew nothing about British American going into liquidation. I thought they would have informed policyholders about this."

The BMA said in its statement on Monday that it had taken the action against BAICO to protect policyholders.

"It is apparent that as a result of the financial difficulties faced by BAICO, policyholders, particularly those with investment or savings products, will very likely face a potential shortfall," the BMA said. Health insurance policyholders will continue to receive cover. The Argus Group has agreed in principle to take on BAICO's health care clients. The transition to Argus is expected to take a few weeks and in the interim period, Government will provide a "liquidity facility" to cover health claims.

BAICO's Bermuda branch did not respond to this newspaper's request for comment yesterday.

Mike Morrison, managing director of KPMG Advisory Ltd., the agent for the Official Receiver, said yesterday his team had received "a significant volume" of calls and e-mails.

"Where possible calls have been answered or where voicemail messages left calls have been returned," Mr. Morrison said.

"We have also received a volume of e-mails. We anticipate that all calls and e-mails received today will be answered today."

Mr. Morrison said he would be offering further guidance to policyholders today.

The BAICO hotline for concerned clients is 294-2651. Queries can be directed by e-mail to infoba@kpmg.bm. Information will be updated at www.kpmg.bm/ba.