Michael Lee Chin’s AIC Group and GraceKennedy & Company will this week announce the creation of a consortium that will inject capital in the troubled Dyoll Insurance Company, now tottering under the weight of claims from Hurricane Ivan last September.

“There is a deal,” an authoritative source said yesterday. “It is the details that have to be pulled together and for the directors of the respective companies to sign off on.”

Although the specifics of the bail-out plan has not been disclosed, it is expected that the partners will use the GraceKennedy-owned Jamaica International Insurance Company as the vehicle for the rescue.

Eventually, the portfolios and Dyoll will be collapsed into a single entity, the source said

A statement by the companies at the weekend spoke of creating a “larger, stronger provider of insurance services in the Caribbean”.

In fact, Sunday Observer sources say, a valuation of Jamaica International is among the due-diligence being concluded ahead of GraceKennedy and AIC’s finalising the deal.

Dyoll was among the companies that came close to the brink during the financial sector collapse during the second half of the 1990s, but made a spectacular recovery, being able to pay off before time loans to it by FINSAC, the resolution agency the government established to reorganise the battered financial sector.

But Dyoll, which at the end of September had shareholder networth of $1.5 billion and reported nine-month profits of $60 million, has again found itself facing insolvency.

The company, in its September report, warned shareholders that it was likely to take a serious hit from hurricane claims, particularly Ivan.

The big thump came in the Cayman Islands where Dyoll has a large portfolio and whose business, in the past, helped to shore-up earnings. Much of the Cayman Islands was devastated by the September hurricane and by unofficial estimates up 90 per cent of Dyoll’s customers filed claims.

No figures have been released, but the claims were apparently sufficient to, even with the cushion of reinsurance, wipe out Dyoll’s capital reserves and forcing Dyoll to seek alliances with stronger companies.

According to Sunday Observer sources, Lee Chin’s AIC – which owns National Commercial Bank (NCB) – and the GraceKennedy conglomerate, headed by Douglas Orane are fully committed to ensuring that Dyoll is in a position to meet its obligations.

“There is no need for panic,” said one source.