Barbados government to approve new CLICO plan soon – Sinckler
From Caribbean360
Finance and Economic Affairs Minister Chris Sinckler said that many of the cabinet papers have been completed and submitted regarding the approval of the formal and final restructuring plan for CLICO.
BRIDGETOWN, Barbados, Wednesday January 8, 2014, CMC – The Barbados government says it will shortly approve a new plan for the restructuring of the operations of the Colonial Life Insurance Company (CLICO) here.
Finance and Economic Affairs Minister Chris Sinckler said that many of the cabinet papers have been completed and submitted regarding the approval of the formal and final restructuring plan for CLICO.
“We expect thereafter the judicial managers will shortly…not sure of the time frame in a couple of weeks or so, will return to the courts and indicate to the courts that the government has thrown its full support behind the restructuring plan which was identified when they last went to the court and had tentative approval for it”.
The appointment of the judicial manager is part of the initiative by Eastern Caribbean governments, including Barbados, to recover some of the assets of policy holders with the Trinidad-based CLICO, which is part of the financially troubled CL Financial Group.
On February 4, 2011 the Supervisor of Insurance in Barbados announced the appointment of a judicial manager and on March 2, the Regulatory Authority in Barbados made an application to the Supreme Court of Barbados for an order of judicial management.
CLICO and its sister company, the British American Insurance Company (BAICO) collapsed in 2009 and the Trinidad and Tobago government signed a shareholders’ agreement with then CLICO chairman Lawrence Duprey following the signing of a memorandum of understanding (MOU) between them on January 30, 2009. The MOU gave the government control of 49 per cent of CLICO’s shares.
The then Patrick Manning government injected seven billion Trinidad and Tobago dollars (US$1.01 billion) into CLICO in 2009 to keep the collapsed insurance firm running and protect policy holders.
A few months later, through the passage of legislation in the Parliament, the Kamla Persad Bissessar led coalition People’s Partnership Government committed a further TT$13 billion (US$2.01 billion) to keep the floundering insurance company afloat.
“We are going to go ahead and implement the Barbados portion of it. We are still waiting on our OECS (Organisation of Eastern Caribbean States) partners to make a decision whether they are going to participate or not and at what level. But we feel that people have been waiting long enough and we’ve taken the decision that we are going to move ahead with that restructuring plan. Basically that plan says that we create a new company,” Sinckler told reporters.
“We put the insurance business sanitized as it is into that new company that the government will create. Two property trusts, one in the OECS and one in Barbados in which the assets will be placed. We will then issue bonds against the value of the assets of course you know here is a deficit between what is owed as liability and what is asset value.
“I believe about 400 million dollars (One Barbados dollar = US$0.50 cents) but they are going to do a current valuation to see what’s the difference.
He said once this is done, the authorities here would invite persons who have EFPA’s (Executive Flexible Premium Annuities) “to take a traditional annuity structured appropriately to suit their investment.
“Those persons who are corporate will be given interest in the new companies and from there we expect the orderly restructuring of that entity will be well on its way,” he added.
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