Life insurance policyholders with British American Insurance Company (BAICO) should continue to pay their premiums while the company's Bermuda branch is being wound up.

That is the advice from the team from KPMG Advisory Ltd., which has been appointed by the Official Receiver to oversee the liquidation of the insurer.

If an alternative insurer is not found to take over the life policies, then all premiums clients have paid since July 29 this year will be repaid.

By continuing to pay the premiums in the interim period, policyholders can ensure that their policies will be in full effect if an alternative insurer is found.

The information came in a posting on the web page created to keep BAICO policyholders and creditors informed of the latest developments (www.kpmg.bm/ba).

However the liquidators say they cannot be sure that payments in respect of life policies will be made in full in future.

""This will depend on the value of the branch's assets when compared to its liabilities," the posted information states.

"The Provisional Liquidator needs to establish if there are sufficient assets with which to pay all current and future policyholder claims in order to treat all policyholders fairly."

"The Provisional Liquidator will work as quickly as possible to clarify the position."

Regulator the Bermuda Monetary Authority announced on Monday that it had started winding-up proceedings against BAICO's Bermuda branch to protect the interests of policyholders in light of the financial difficulties faced by BAICO and its Trinidad and Tobago-based parent company CL Financial Group.

Health insurance clients have already been assured that their policies will continue to be honoured. The Argus Group has agreed in principle to take on BAICO's health clients, but in the several weeks that the transition to Argus is expected to take, Government is providing a "liquidity facility" to ensure that claims are met.

The liquidating team's job is to assess assets and liabilities and to settle liabilities as far as possible. They plan to convene a meeting of policyholders late next month.

Policyholders or creditors with a query should address it to infoba@kpmg.bm or call 294-2651. Information updates will be posted on the Internet at www.kpmg.bm/ba.