Left: Michael Lee Chin - RICARDO MAKYN/STAFF PHOTOGRAPHER. Right: Neville Blythe - WINSTON SILL/FREELANCE PHOTOGRAPHER
MICHAEL LEE Chin's AIC company has acquired a major stake in United General Insurance Company (UGIC), sources close to AIC have disclosed.
The cash-strapped UGIC is the largest and one of 11 member companies of Neville Blythe's UGI Group of Companies, as well as being the largest general insurer by far in the island. However ,the company was no longer listed on the UGI website as a member company as of yesterday.
The Gleaner was unable to get a comment from the UGI Group. In a statement earlier this year, however, Mr. Blythe had confirmed that negotiations were ongoing with a company which he said had significant interests in the Caribbean. He said then, "UGI Group does own a major stake in United General Insurance ... What we are sharing is a stake in United General Insurance."
UGI MAINTAINS INTEREST
The chairman and chief executive officer of the UGI Group of Companies, Mr. Blythe, said then that the UGI Group would maintain an interest in the insurance company.
Jamaican/Canadian billionaire Lee Chin owns AIC, and has used a Barbados-based subsidiary as a vehicle to carry out a series of acquisitions across the region.
The impending involvement of new investors and a change in the shareholding structure of Jamaica's largest general insurer is part of a move to strengthen the company which in 2004 and 2005 failed the minimum assets test set by regulators to ensure insurers can cover potential liabilities.
Established in 2001 under the Insurance Act, the minimum assets requirement for general insurers was that their assets cover 100 per cent of their liabilities. This was increased to 110 per cent in 2004, with further increases every other year until 2010.
Where an insurer fails to meet the assets standard, the regulators are obliged to ensure that a company in this position take action to increase the capital base in order to continue in operation. The result of these changes prompted UGIC to look to the AIC-controlled National Commercial Bank from then, and culminated in the recent transaction.
United General Insurance Company was established in 1986, following the acquisition of the operations of a general insurance company, whose existence dates back to the 1960s, the UGI website stated. The company provides general insurance cover for virtually anything of value - from home and contents and personal assets to businesses, employees and vehicles.
