CLICO insurance portfolio to be sold, policyholders express concern
The Central Bank of Trinidad and Tobago (CBTT) says it has engaged international management consulting firm, Oliver Wyman, to assist with the sale of CLICO's traditional insurance portfolio.
The sale proceeds will repay the funds pumped into the failed insurance company by the Trinidad and government and compensate policyholders, in keeping with the CLICO Resolution Plan, the central bank said in newspaper advertisements.
The move to sell the insurance portfolio follows a directive by the central bank last month for CLICO to dispose of its shares in Methanol Holding Trinidad Limited (MHTL) "to a suitable buyer, consistent with the independent valuation and with the requirements of the MHIL Shareholders' Agreement", the advertisement said.
The CBTT, which assumed control of CLICO in 2009, said the 'Resolution Plan' has three phases, the first involving payment to government, the single largest creditor of CLICO, and to close to 1,700 policyholders, who held short term investment products (STIPs) but opted not to take up government's off to be paid through bonds and shares in the CLICO Investment Fund.
The government has already recouped 85 per cent of the TT$7 billion owed to it from its rescue of the company, and CBTT said that the second phase will "meet the 15 per cent of the claims of the government and non-assenting STIP policyholders.
The bank said that proceeds from the sale of CLICO's shareholding in MHIL are intended to fund this phase.
In the third phase, creditors outside of CLICO's Statutory Fund, will be paid following the sale of CLICO's shareholding in Republic Bank Limited (RBL) and other assets. Work to realise this goal is underway, the CBTT said in the advertisement.
Reacting to the update, the CLICO Policyholders Group says it is concerned at the silence of the CBTT on the balance owed to the over 15,000 'assenting' policyholders who accepted the previous government's offer of zero-interest bonds and CLICO Investment Fund units.
"Our information suggests that while this first partial payment to the non-assenting policyholders represents 85 per cent of the contractual cash value as at the end of the interest term specified on the policy certificate, in the case of the Government as assignee and trustee of the rights of the assenting policyholders this is not the case," said CPG president Peter Permell.
Pernelll, in a statement, said the group is hearing talk of an agreement made between the previous government and the central bank "to only claim the actual payout value of the offer and not the full amount that is contractually due to the assenting policyholders."
"If true, this is extremely troubling in light of the fact that CLICO is now solvent and its Statutory Fund is fully funded," he said.
"Moreover, the government as assignee and trustee for these insurance contracts is standing in the shoes of the assenting policyholders and as such is the only entity legally empowered to claim, on our behalf, the full amount that is contractually due to us from CLICO."