British American: Customer stories

My disabled niece has been left short of funds

Patsy Swan put some of her hard earned cash aside in the hope that she could leave a little something for her family when she was gone.

Mrs. Swan faithfully made her payments every month to British American Insurance, secure in the knowledge that the company would pay out $20,000 to her handicapped daughter and two grandchildren when she passed on.

But when she died in May of last year, her family could not collect on the policy.

At that time British American was still in business.

Mrs. Swan’s sister, Donna Ingham, who will also lose money on her own life insurance policy, said her sister’s descendants kept getting put off by British American.

“They kept telling them to ‘come back, come back’. They were told they needed this paper and then that paper.”

She said her sister had policies with two other firms — Colonial and Argus — which had paid out in a timely manner.

But she says, British American kept stalling and stalling — and then they went into provisional liquidation. Now Mrs. Swan’s daughter will only be paid a fraction of that $20,000.

Ms. Ingham said: “My sister’s daughter and grandchildren were supposed to collect as her beneficiaries. They were supposed to collect a couple of days before British American closed their doors, but were told to ‘come back’ and ‘come back’ until British American finally closed its doors.

“We financially take care of my niece with some support from Government, but my sister provided for her specifically in her life insurance. We never got any money from that.

“That’s what really has [upset me]. The fact they kept telling them to ‘come back, come back’. They were told they needed this paper and then that paper. We didn’t have any problem with Argus or with Colonial. I believe they were just putting them off so they wouldn’t have to pay them.

“We had the death certificate. Argus was straightforward and with Colonial there was a little back and forth but really no problem. But with British American we didn’t get anything. There were three beneficiaries, the two grandchildren and her handicapped child.

“We’re annoyed at that. I’d still like to get mine, but my sister provided for my handicapped niece and she’s not going to receive anything from that. It is really annoying.”

Ms. Ingham is also out thousands of dollars for her own life insurance policy. She was refunded $4.86 for a contents insurance policy, which she also had with the firm.

Ms Ingham said communication has not been good among the parties involved and the policyholders since British American went into liquidation.

“I only continued paying because they told us if we didn’t we’d lose everything.

“They didn’t have the decency to have a meeting with any of the holders. That’s annoying because we’re left to go on from what we hear off the street or off the talk shows. I want some open dialogue and somebody should be responsible to speaking to us.”

She said ideally a panel of representatives from the Bermuda Monetary Authority, British American and KPMG should answer questions.

Ms Ingham did get some money back from BA.

“To send me a $4.86 cheque for my contents insurance was just pathetic.”

We really need to know what we’ll get back

A preschool teacher has been left “hurt and upset” by the failure of British American.

Karen Joyiens said the fiasco had left her wondering if she would have been better putting her money under the mattress.

She and her husband have paid close to $50,000 to the bust insurer over the last 25 years.

She has been in the life insurance plan since 1994 while her husband, Byron, joined in 1984 at the age of 17.

Ms. Joyiens said: “The intent of me having this life insurance was for my kids to have something to live off. It was for my children. We as parents put things in place for them because at the end of the day you want to give them something you didn’t have at that age.

“I’m upset for that reason but I’m also upset because this has happened to me before.”

“You think you’re putting your money in a safe haven and I come to find out I’ve lost thousands of dollars.

“My plan was for $100,000 and I was paying $100 a month. It’s a frustrating experience because you think you’re putting your money away in a safe nesting place… and you’re not guaranteed anything.

“My initial reaction was ‘oh no, I’ve lost money again.’ I’m here struggling trying to do the best for my kids. I’m making this extra sacrifice thinking I’ve got some extra money at the end of my life and now my children aren’t guaranteed that insurance policy.”

She added it was “disheartening” not to know what percentage she will be getting back.

Ms Joyiens said the communication from the liquidators had been poor. “When I called KPMG they wouldn’t call me back in a timely manner,” she added.

The teacher said the British American fiasco almost makes her think the safest place for her money is a mattress.

“I’m now going to be working from scratch. It makes me wonder ‘where do I put my money where it’s safe?’

“I don’t spend stupid. I make a concerted effort to make the sacrifices. I don’t take monthly trips because I’m working for my kids. I was hurt and upset by this.”

For a whole year there has been no communication

Shawnette Somner wants her money back, but just as important she wants some answers.

The teacher has been a policyholder at British American for 12 years and figures she’s paid the company $50,000 over that time frame.

She was also expecting to get $5,000 as part of the bonus programme.

“I was due to get my bonus from my two sons’ policies last October and I was told I’m not getting it.”

She was supposed to get a bonus of $5k every five years.

She was away on her summer holiday in 2009 when she came back to Bermuda to find that British American had gone into liquidation.

“I had heard about it through the grapevine. They claim they had sent letters out to all the policyholders, but I never got a letter. I had given them my new address but they were still using an address from 10 years prior.”

Ms Somner said that while others got the initial letter she hasn’t received anything from liquidators KPMG or the Registrar of Companies.

“For a whole year there hasn’t been any communication on what’s been going. I met with [an executive] at KPMG in March. I had previously spoken with the ladies at the British American office, but they were clueless.

“He said if I continue paying my premium, when there was a resolution, we would  get what was due to us, but if we stopped paying and a resolution was reached, we’d get nothing.

“It was a uncomfortable feeling because that basically told me that I had to keep paying to see what happens and that’s not good enough.”

She was told the worst-case scenario would see British American customers get back 100 per cent of what they had paid in from July 2009 until some sort of resolution was reached.

Ms Somner said: “They won’t face us. Why won’t someone face all of us in a meeting? What has happened to our money? We need answers to this. Nobody is speaking.”

She added: “I want my money back and I think we deserve answers. We entered into an agreement with this company in good faith and at the end of the day we had the carpet pulled out from underneath us. It’s not right; It’s not fair.”

I knew it wasn’t viable for other insurers to pick up the slack

Andrea Matcham made one payment to British American went it went into provisional liquidation then stopped.

The underwriter, whose cousin worked at British American at the time, said the things she was hearing from him and what she was being told by KPMG weren’t the same.

She had an annuity plan in which she was contributing about $50 a month as well as two life insurance policies and a fire contents policy. She estimates there was slightly less than $7,000 in the annuity and two life insurance policies valued at $250,000.

“I made one payment that first month. Within that month I was contacting a gentleman inquiring about what was going on. I would speak with my cousin and he would say one thing and this man would say something else. I didn’t like the inconsistencies over answers. It seemed like it was a big secret about what was happening in Bermuda. That’s when I said ‘That was it’. I paid one premium and stopped. I said ‘I’m going to get my money back, whatever I have to do’.”

She said a relative of hers died and the claim wasn’t paid.

“My cousin was his agent and he felt terrible. The family got nothing.”

Ms Matcham said from her experience in the insurance industry she knew it “wasn’t viable’ for another local insurer to pick up British American’s policies.

“I was calculating everything. I knew in a year’s time I’m not going to get interest on the money I’m paying [to British American]. I was better off getting cover elsewhere.”

She added: “Who can you trust with your money? You’re better off putting it in the bank and collecting interest. It’s not worth the risk. I’m fed up.

“I’m disgusted. We’re honest working people looking out for ourselves by providing and preventing a financial burden and [then this happens].”