By Kimberly Ramkhalawan
December 9, 2022
Why now? It’s the question being put forward to the Central Bank Governor of Trinidad and Tobago, Dr. Alvin Hilaire, over its timing in handing over CLICO. In justifying the move, he says it was a matter of ‘financial stability’, a place where he believed CLICO had arrived, where it was ready to embark on ‘new business’, making it possible for the Central Bank to exit the arrangement..
At a press conference at the Central Bank, Port of Spain on Tuesday morning to announce that it has ended the period of emergency control over Colonial Life Insurance Company (Trinidad) Limited (CLICO) earlier. The news comes several days after which, effective December 1st, the CBTT relinquished control over CLICO, since taking over the company’s collapse in 2009.
Dr. Hilaire in an attempt to further explain the timing, “Everything is a question of balance. Emergency control is supposed to be temporary and short. We would have liked to leave as early as possible. We could have left before, but we are not looking at the profitability of the company alone. We are looking at the governance structure, capacity to move things forward and the stability of the financial system.”
Executive Chairman Claire Gomez-Miller of Colonial Life Insurance Company (Clico) shared the relinquishment comes after it was also revealed that the company had already paid off $17.3 billion in debt, inclusive of interest, to the government and is looking forward to creating new business and continuing to serve its policyholders.
But with the handover, in order to make the company viable, and to this, Gomez-Miller say CLICO, the insurance company will commence new business. In her words, “It means to say that for us to survive going forward, we must start new business. So CLICO will be starting new business as soon as we get our licence to do so.” The insurance company has been closed for new business since 2014, which she linked to the decision to sell its insurance portfolio.
Gomez-Miller admits the company does still owe a $1Billion in debt, and hopes to repay with the sale of its Methanol Holdings International Ltd (MHIL) shares, as part of the continued liquidation of shares. Explaining how this works, she underscored that as the liquidation continues of CL financial, it brings that part of the business to an end where it ceases to exist, while its insurance part under CLICO will continue to build on what she describes as a solid footing.
Another question involves, with CL Financial holdings in liquidation mode, what does it mean to CLICO?
Gomez-Miller says “CL Financial is now in liquidation. I have never experienced when a company has gone into liquidation that it is ever revived. It is not like going into receivership. When a company is in liquidation, it is liquidated. So I don’t expect CL Financial, after the liquidation, will continue to exist.”
Noting that CLICO Investment Bank was a subsidiary of CL Financial and not CLICO, while CLICO also had no investment in British American Insurance (BAICO). However, CL Financial’s largest remaining assets is its 51 per cent stake in CLICO.
In a turn of events since the announcement, Clico Policyholders Group (CPG) chairman Peter Permell is calling for answers of outstanding monies owed to policyholders, and says this can now be done since its now been deemed “extremely profitable” judging from statements made by the Executive Chairman.
And while he expressed elation to the news of CLICO finally being in the black, he shared “In the words of late Dr Martin Luther King Jr, ‘Free at last, Free at last! Thank God almighty, Clico is free at last!’
However, he is expressing disappointed that the Central Bank has not only taken this long, some 13 years to exit Clico, but more importantly, they have done so without ensuring that the over 15,000 policyholders were paid their balance of monies contractually owed to them, especially when circumstances, Government has been repaid all the monies that were advanced to Clico as a result of the bailout”.
Permell says he hopes answers to these questions can be shared when the group of policyholders meet with the Central Bank next week.
Other matters arising, subsequent to the announcement, the Opposition with Trinidad and Tobago questioning how will this affect Republic Bank Holdings Limited, the bank in which worked with
The fund was established on October 31, 2012 as a close-ended mutual fund, intended to hold the initial assets and public shares from Republic Bank Financial Holdings (RFHL) for a period of ten years. The CIF began trading on the Trinidad and Tobago Stock Exchange on January 2013 and the Fund is due to be wound up, or redeemed in January 2023. At the redemption date, the unit holders of the CIF will receive the deposited property of the Fund, comprising its Republic Bank shares and Government securities, based on their holdings.
Former Temporary Opposition Senator Taharqa Obika says the Central Bank Governor and the government ought to come clean on the latest move to hand over CLICO, as to what will happen to partners in the bailout, Republic Bank holdings, as it pertains to its shares. Expressed this concern over RFHL, as he says many of the nation’s major projects tethers on Republic Bank, including the Mitsubishi agreement for the gas to dimethyl ether project, citing it is a predicament to put the country’s economy which is dependent on the indigenous bank for doing much of its business. Obika says it was a matter of the Central Bank explaining the implications of the winding up of the investment fund in their next monetary policy report.
Zero coupon bonds over a 20-year period was carded to be converted into Clico Investment Fund (CIF) units scheduled to be terminated on January 2nd, 2023.