Dyoll Settlement Decision in Court

Ken Krys, Dyoll Insurance’s
Liquidator in the Cayman
Islands

Friday,  November 18, 2005

JOINT liquidator for the bankrupt Dyoll Insurance firm, Ken Krys, believes a court ruling expected on the company’s assets in Jamaica next week could have serious implications for the insurance sector in the Cayman Islands.  

Mr Krys, who looks after the Cayman side of Dyoll’s liquidation, said the Jamaican courts would decide next Wednesday what is the real assets of the company and how they would be disbursed amongst its 8,000 creditors. 

The Cayman financial expert is worried that the Jamaican regulators, Financial Services Commission (FSC), intended to pay out US$6 million to 3,000 Jamaican creditors, leaving the 5,000 Cayman creditors to share US$2 million.

At stake are the company’s potential assets of US$10 million which are expected to be paid out as compensation for property and motor vehicle insurance claims and to shareholders after Hurricane Ivan struck the Cayman Islands and Jamaica last year.

The assets are reported to be in the region of US$6 million (deposits in Jamaica), US$2 million (deposits in Cayman) and US$2 million in others.   

“The Jamaican regulators want to protect only Jamaican creditors so we will be asking the court who is protecting the Cayman creditors,” he said. 

According to him, the FSC’s position would leave Jamaicans with close to $0.50 on the $1.00 to Caymanians’ $0.10. 

He added that local creditors could fetch higher than the $0.17 per $1.00 rate than had been projected before deposits in Kingston surprisingly skyrocketed to US$6 million from the initial US$740,000.  

“We would want everybody to get up to the same level so that everybody gets treated equally,” he said ahead of the Kingston court date.

Mr Krys, who is a local partner in the RSM accounting firm in George Town, thinks the courts’ verdict could have  a bearing on the amount companies may have to deposit to conduct business here.   

“As far as I can see the impact of that could demand greater deposits be held here in Cayman and the cost of doing business would increase for the insurer,” he said.

He added that it was a catch-22 situation for the Cayman Islands and would have a significant impact on how the regulators operate in the future.  

“We are in a catch-22 situation on what the court decision will have on Cayman. An unfavourable decision will have a significant impact on Cayman insurers and how the regulators do their jobs,” he said.

He also had concerns about some insurance companies who collected premiums here and stashed away their earnings in their head offices overseas.

The local liquidator added that the court’s ruling could also shed light on the issue of “substantial” sums of money leaving the country from insured clients.

“It could impact on companies doing insurance business in Cayman because a large number of insurers are established elsewhere and a substantial number take premiums and remit them back into the home country,” he added.

Mr Krys also has concerns about the local laws, saying there are questions needing answers on the protection of Cayman Islands’ interest in the insurance sector.  

“If the regulators can take the decisions to ring-fence those assets for the benefits of their policyholders then it raises considerable questions regarding what measures are in place to protect Cayman policyholders,” he said.

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