T&T compensates Eastern Caribbean for CLICO collapse
Finance Minister Larry Howai says Trinidad will sell the financially troubled Colonial Life Insurance Co Limited (CLICO), whose collapse in 2009 sent ripples throughout the Caribbean, only if the price is right.
Howai, speaking at the meeting of the Standing Finance Committee of the House of Representatives, also said the government would be paying out TT$258 million before yearend to several Eastern Caribbean countries for managing the costs involved in the CLICO fallout. He said the payment to the Organisation of Eastern Caribbean States was a grant, not a loan.
The Standing Finance Committee is discussing the TT$9.4-billion national budget approved by Parliament earlier this month.
Howai said the government made no provisions for Atrius in 2015, the company being established to take over the assets of the regional insurance company, because it was no longer pursuing that option.
"We expect that we would be disposing of the portfolio by way of a portfolio sale," Howai said.
The pending sale was first disclosed in May by the central bank.
Opposition legislator Colm Imbert sought to determine why the government would have had to invest TT$1.5 billion more to purchase the assets of CLICO and to capitalise the company under the new insurance regime. He also wanted to know whether the government was moving to wind up the company.
"Yes ... the intention is to sell. It depends on whether we get the price that we are looking for. If we do not get the price we are looking for ... then it would have to continue to operate under Section 44," Howai said, adding that the government was in the process of getting the valuations done and was also hiring an investment bank as adviser.
Asked by Opposition Leader Dr Keith Rowley whether there were any assets of CLICO in the Eastern Caribbean countries which could be taken over, Howai said attempts were made to realise the assets of CLICO, but that very few of those assets were domiciled in the Eastern Caribbean states.
"So the net effect of what could have been realised would have been very minimal," he said, adding that government did not ask for any additional assets to be assigned to Trinidad and Tobago.
The finance minister said that there had been constraints on the Trinidad and Tobago banks owning or acquiring banks in the OECS, but as a condition of disbursement of the TT$258 million, the Trinidad government asked those countries to remove the restrictions and put mechanisms in place to strengthen their regulatory environment so there is no repeat of the CLICO debacle.