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British American policy holders frustrated by wait for cash

British American policy holders want to know why they still haven't been paid two years after the insurer went into receivership.

Shawnette Somner accused the liquidators of giving her and thousands of other out-of-pocket policy holders “the runaround” and failing to keep them informed.

Some 3,800 policy holders paid out as much as $40,000 to $100,000+ to British American Insurance Company over periods of 10 to more than 20 years, before the branch folded in 2009.

As part of an agreed upon plan, they are due to get back less than half of the value of their policies.

Ms Somner claimed the money for the policy holders was sitting in the bank.

“So why can't we get our cheques now?” she demanded.

Ms Somner said the policy holders had been told earlier his year that there would be two cheques issued to them. But now the liquidators have decided to only issue one, and appear to be awaiting the sale of the BAICO building on Front Street before they issue any money.

But Ms Somner said: “The money in the bank represents 40 percent of what we ought to get. The sale of the building will represent 10 percent.”

She said money is clearly there and the liquidators “need to pay us now - with interest!”

“It's bad enough we aren't getting back 100 percent of what we're owed,” she said, adding, “The communication between British American, KPMG and the policy holders has been very poor in my opinion. I am not the spokesperson for the policy holders but I get calls all the time from them because they have questions that aren't being answered.

“If you call the hotline you just get voicemail and the website is not updated.”

Payout calculations are based on valuations of the policies carried out by actuaries.

Liquidators agents KPMG Advisory acknowledged yesterday it's expected there will be one cheque issued to each policy holder.

A statement yesterday from the official receiver and liquidators said: “Following sanction of the scheme of arrangement and as indicated by the Official Receiver at the time of the Scheme Meeting, efforts are continuing to sell the building that houses British American and in which British American has an interest.

“Once that sale is completed, and we anticipate that will be very soon, the cheques for creditors will be prepared.

“Notice will be given to all creditors once the cheques are ready for collection.

“The Official Receiver is grateful for the patience exhibited by creditors during this process and understands that there may be frustration on the part of some. Please rest assured that every effort is being made to issue the cheques as soon as possible.”

BAICO's assets in Bermuda, including the stake in their building, are approximately $11 million and its liabilities are $21 million.

Liquidators have struck a deal to sell the insurer's distinctive blue building at 133 Front Street.

Earlier this year, Mike Morrison, of liquidator's agents KPMG Advisory, told

The Royal Gazette the building had a price tag of $3.6 million.

Close to being sold: The British American Building on Front Street

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Published September 28, 2011 at 8:00 am (Updated September 28, 2011 at 8:56 am)

British American policy holders frustrated by wait for cash

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