Insurance Row Heats Up
A group of insurance firms fighting two pending acquisitions by Colina Insurance Company is charging that the Registrar of Insurance Companies reported "erroneous" information to the Cabinet Secretary.
The 10 companies, in a response letter to Secretary Wendal Major, said the Registrar, Roger Brown, drew some unfortunate conclusions on the market share that Colina might enjoy if the transactions were approved, by using the combined health and ordinary life premium levels as a benchmark.
Mr. Brown had written to Mr. Major accusing the companies of lying in a recent PowerPoint presentation to Prime Minister Perry Christie. Mr. Brown also said that their charge questioning the actions of his office as it relates to Colina "is most damning".
The insurance companies have banded together in an attempt to prevent Colina from getting regulatory approval to acquire Canada Life and Imperial Life. Although there was a media report last week that Colina received approval for Canada Life, there has been no confirmation or announcement in this regard.
Mr. Brown said it was "misleading and or derogatory" for the insurance firms to say that Colina will control 70 percent of the ordinary life insurance market.
In his letter, he said, "The use of the potential 70 percent market share statistic is somewhat disingenuous as in the local insurance market the different companies (other than Laurentide and Atlantis Medical) do not sell just one product."
He informed that, "Life & Health companies sell a variety of products and in this market "market share" is determined by the gross premium income from all Life & Health products."
Mr. Brown said that if all the acquisitions were approved Colina would control 43 percent of the total Life & Health market.
But the companies in their letter to Mr. Major, dated February 4, said it appears that the Registrar "has missed the point entirely."
"Our concern is not only on the level of premium income in the insurance industry controlled by any one entity but is also based on the fact that the transaction, if approved, will create an entity that will control very significant long-term financial assets with significant implications for correlation of the capital markets of the Country."
The Registrar provided Mr. Major a breakdown of the gross premium income of Life & Health companies, but the group of companies against Colina's acquisitions said this information was erroneous.
They said the breakdown in the letter understated Colina's premium income.
"All the premiums would have to be placed on a more comparable basis for the calculations on market share to be accurate or meaningful," they said.
The Registrar, who wrote to the Cabinet Secretary on January 8, said when his office received a report that Colina was soliciting business before its license was approved, letters to cease and desist were immediately sent out.
"In addition, a meeting was held with the principals of the company and a warning given directly that they must stop whatever they were doing," Mr. Brown wrote.
The companies said this action by Colina "speaks poorly of the controls, procedures and corporate governance standards of Colina."
Given that as of January 8, the Registrar's Office had not seen a signed Heads of agreement or a Purchase Agreement, the companies said, "In view of that reality, we do not understand how it was possible for the [Office of The Registrar of Insurance Companies] to approve the letter sent under date of December 1, 2003 by Imperial Life to the affected policyholders.
"This is particularly in light of the fact that Imperial's letter stipulated a deadline which clearly would have been arrived at long before the ORIC could even begin to review the merits and implications of the proposed transaction."
Fighting Colina's acquisitions are executives of Atlantic Medical Insurance Limited; Bahamas First Holdings Ltd; Fidelity Bank & Trust International Limited; British American Insurance Company; Insurance Management (Bahamas) Ltd; Sunshine Insurance Ltd; Family Guardian Insurance Co. Ltd; Security & General Insurance Co.; J.S. Johnson & Co. Ltd.; and RoyalStar Assurance Ltd.