Home' Trinidad and Tobago Guardian : March 28th 2015 Contents A5
Saturday, March 28, 2015 www.guardian.co.tt Guardian
INTRODUCING THE HONDA OEM*
$1.00 Per Litre/CNG
*ORIGINAL EQUIPMENT MANUFACTURER.
3 YEARS HONDA WARRANTY
TEST DRIVE ONE TODAY!
Port of Spain: 624-3714 • 625-2277
San Fernando: 657-2277 (CARS)
Chaguanas: 672-0991 • 671-3913
Tobago 639-2277 (CARS)
Central Bank Governor Jwala Rambarran
has announced a five-point plan to settle
outstanding debts owed by the Colonial
Life Insurance Company (Clico) to the T&T
Government and its policyholders.
Speaking at a press conference yesterday,
Rambarran said the resolution plan "will
bring closure to this deep financial wound
inflicted on thousands of Clico policyholders
and Central Bank is doing all in its power
and more to ensure that such a financial
trauma will never again be inflicted on you."
He said the company is now in a position
to make its first payment of just over $7
billion to the Government. This amounts
to more than 40 per cent of Clico s debt to
Government, he said.
The development comes almost six years
after the collapse of the insurance empire
in 2009, which prompted the Government
to embark on a rescue plan involving billions
Rambarran said the Government, which
is Clico s biggest creditor, received $4 billion
in cash yesterday, with settlement of the
remaining $3 billion in lieu of cash through
the transfer of three Clico assets---Angostura
Holdings Limited, CL World Brands Limited
and Home Construction Limited.
In addition, Clico s 1,500 (short term
institutional products) STIP policyholders
will receive 85 per cent of their claims,
totalling $950 million, in three months, with
the remaining balance after the sale of
Methanol Holdings International Limited
"These two payments are being made
according to the terms of the Clico Reso-
lution Plan developed by Central Bank and
finalised last week Monday after consultation
with the Minister of Finance and the Econ-
omy, as required under Section 44F of the
Central Bank Act.
"Central Bank s Clico Resolution Plan
was developed to repay all creditors and
policyholders and to ultimately facilitate the
transfer of Clico s traditional insurance port-
folio to a suitable buyer by ensuring that
enough appropriate assets are put aside,"
He said Clico s December 2014 manage-
ment accounts show that there are now
sufficient assets to pay the company s lia-
bilities in its statutory fund. This is mainly
due to the sale of its shareholding in MHTL
last October, which added just over $7 billion
in cash to the statutory fund.
Rambarran reveals five-point Clico plan:
won't lose out
Chairman of the Clico Policyholders Group Peter
Permell has described the plan to settle
outstanding debts owed by Clico as a vindication
of the policyholders.
"The fact that the Central Bank can now pay
out $7 billion means Clico had real assets which
have now appreciated in value," he told the T&T
Guardian after yesterday's announced payback
"Policyholders can now hold their heads high.
They were stigmatised and they did nothing
Permell said he welcomed the announcement
made yesterday by Central Bank Governor Jwala
Rambarran, which followed years of advocacy by
the policyholders and their representatives.
"This means that the company is now solvent---
their assets are now more than their liabilities,"
Permell noted that the sale of Methanol
Holdings Trinidad Ltd (MHTL) had been "a game
changer" in their fight with the company.
"This is not taxpayers' money, this is what the
policyholders invested in Clico. The Central Bank
has not monetised a lot of those assets," he said.
Permell said he is now awaiting a statement by
Finance Minister Larry Howai on the matter.
MOVE PLEASES PERMELL
In January 2009, the CL Financial Group
experienced a liquidity crisis that resulted in a
"bail out" agreement by which the T&T
Government loaned the company $7.3 billion to
maintain its ability to operate, and obtained a
majority of seats on the company's board of
At the time, CL Financial controlled more than
$100 billion in assets in at least 28 companies
across the region and the world and its financial
interests covered several industry sectors,
including banking and financial services, energy,
real estate and manufacturing and distribution.
The largest financial institutions in the group
managed assets of over $38 billion, which was
more then 25 per cent of T&T's GDP.
In addition to Clico, the group's holdings
included the British American Insurance
Company Limited, one of the main insurance
companies in the Eastern Caribbean.
The collapse triggered the intervention of
Government through the Central Bank, which
signed a memorandum of understanding (MOU)
agreeing to take steps to correct the financial
condition of Clico, and protect the interest of its
depositors, policyholders and creditors. Then
Central Bank Governor Ewart Williams assured
depositors and policyholders their money would
According to the MOU, which was signed by
then Minister of Finance Karen Nunez-Tesheira
and Lawrence Duprey, in return for government
protection of the interest of depositors,
policyholders and creditors, CL Financial agreed
to sell its Republic Bank, Methanol Holdings
Trinidad Limited (MHTL) and CMMB
shareholdings, and any other assets as required.
Founded as an insurance company, Colonial Life
Insurance Company (Clico), by Cyril Duprey, it
was expanded into a diversified company by his
nephew Lawrence Duprey. CL Financial then
became one of the largest local conglomerates in
the region, encompassing over 65 companies in
32 countries worldwide.
Central Bank Governor
Jwala Rambarran announces
the five-point Clico
resolution plan yesterday.
Rambarran said in the first phase of the
payment plan, Government has been paid
$4 billion in cash. STIP policyholders who
did not take up Government's offer to be
paid through bonds and shares in the Clico
Investment Fund, will be paid S950 million
of the just over $1 billion owed to them.
"Government and these 1500
policyholders will receive first priority for
payment as their policy obligations are
accorded legal protection through assets
held in Clico's Statutory Fund. Of course,
Clico's 100,000 odd traditional policyholders
have equal protection through the
Statutory Fund and our process has
ensured that sufficient assets are available
to meet their obligations," he said.
The second phase will cover the
remaining 15 per cent of claims from
Government and the balance of non-
assenting STIP policyholders, and will be
funded from the proceeds of the sale of
Clico's 57 per cent shareholding in (MHTL)
for an estimated $2 billion.
The third phase will cover the company's
liabilities to non-government mutual fund
holders and non-residential STIP
Rambarran said Clico's obligations to the
group that did not accept the Government's
voluntary offer would amount to about
$410 million. This payout will be funded by
the sale of Clico's seven per cent
shareholding in Republic Bank Limited and
the sale of other assets.
The Central Bank Governor assured that
Clico's 18,000 assenting policyholders "will
not be made worse off" for accepting
Government's offer and Finance and the
Economy Minister Larry Howai will
announce arrangements for that group
He said in the case of British American
Insurance Company Trinidad Limited (BAT),
there is a broadly similar payment plan but
financial constraints within the company
mean that some assistance is required.
"As a result, Government will provide
funding assistance to BAT to meet
statutory fund and other creditor liabilities
and to provide the necessary assets to
enable the potential transfer of BAT's
traditional insurance portfolio to a suitable
buyer," Rambarran said.
GOVT GETS $4B TRANCHE
Links Archive March 27th 2015 March 29th 2015 Navigation Previous Page Next Page