September 20, 2013 at 1:20 a.m.
‘We’re disgusted and frustrated’
Disgruntled former policyholders for bankrupt British American said they are not giving up in their quest to get more money from liquidators KPMG.
However, the firm says there’s nothing left in the kitty but they understand why policyholders would be upset.
Approximately 50 people showed up to the offices of KPMG yesterday. They were met in the lobby by a security guard at the elevator and KPMG executives Malcolm Butterfield, Mike Morrison, and chairman Neil Patterson.
Sarah Jackson, acting as a spokesperson for the group said:
“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.”
The group is still seeking answers.
Ms Jackson said: “We want a full report on what has transpired. We want a full financial account of those who were paid for handling the liquidation. We are certain that KPMG has received an enormous amount of money while the average hard working policyholder now has to resort to measly checks one some as low as only one cent.
“We have had enough of the dishonesty, and the run around we’ve all been given.”
Mr Morrison told the Bermuda Sun: “I told them there was no more money. All the assets have now been distributed. There’s no prospect of a further recovery.”
Mr Morrison said every policyholder received 37.5 cents on the dollar for agreed upon claim.
He said: “People are upset on how their policies have been valued. There’s been some misunderstanding. If you have a term life policy or a whole life policy for $10,000, that doesn’t mean your claim is $10,000 when the company goes bust. If you died, you might have a claim for $10,000 but if you haven’t, it means you paid money into a policy that you haven’t gotten the value from because the event hasn’t occurred.”
He said an actuary was used to place a value on every policy. It took in a number of factors such has how much money was paid in, how much the policy was worth, the age of the person.
“There was even the factor that people hadn’t been paying their premiums.
“We had this mechanism called the scheme of arrangement where we could value all the claims through this process and everybody accepted the valuation. Not one person, ultimately, disagreed with the value ascribed.”
Mr Morrison said people were disappointed with the second payment, which was a result of the sale of the British American building on Front Street.
“Real estate prices being what they are, that wasn’t big as anticipated.
“I understand people saying they’re not happy with the money they’re getting... but to say they’re not happy with their claim, that was a long time ago when they could say they weren’t happy.”
He added: “Insolvent companies don’t have enough assets to pay people in full.”
Mr Morrison said British American creditors in the Caribbean are still owed more than $500 million and Bermuda policyholders are the only ones who have been paid to date.
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