Insurance Sale Attracts Eight Bidders

Eight life insurance companies will be competing to buy the insurance portfolios of Mutual Life, Crown Eagle and Dyoll. Three of the companies are local ones with the remaining five coming from the wider Caribbean.

"We are pleased that this level of interest is being shown in the portfolios being offered," FINSAC Managing Director, Patrick Hylton, said in commenting on the company's receipt of eight Memoranda of Understanding, the first stage of a tender process which will see FINSAC divesting itself of the traditional life, equity linked, group life, non-lump sum interest-sensitive and health, as well as management of the pension schemes of the failed insurance companies.

"This is, however, the first hurdle for the companies, which must now embrace the tender process in earnest and supply documentation to establish their bona fides, even as FINSAC provides them with facts and figures to inform their bids," Mr. Hylton said.

FINSAC has responded to the MOUs, itemising the documents to be supplied by the bidding companies to enable it to assess the companies. Requested information and documents include profiles of the companies' lines of business including: number of policies, total sum insured and annualised premium income; recent Annual Reports and Management Accounts and corporate information like ownership and corporate group structures and profile of Officers.

It has also outlined deadlines and requirements at each stage of the tender process. One requirement is an operating plan setting out the business segments in which bidders operate or intend to operate; the products to be sold, the distribution of products and proposals for administering the portfolios to be acquired.

FINSAC's due diligence, in addition to assessing each company's financial capability, will also look at its qualification for a Jamaican Insurance Licence; whether or not it meets the standards of the new Insurance Act and how they measure up to fit and proper criteria.

The current tender, FINSAC's main thrust to divest the insurance portfolios of Crown Eagle, Dyoll and Mutual Life, was announced by the Minister of Finance last week.

Mr. Hylton stressed that "a level playing field for all bidders and the best deal possible for policyholders will be hallmarks of the tender process to determine the purchaser or purchasers of the portfolios of Dyoll, Crown eagle and Mutual Life".

February 20,1999