TT:Billion dollars to CLICO policyholders
PORT OF SPAIN, Trinidad – The Trinidad and Tobago government today said it had paid out TT$1.1 billion (US$183 million) to more than 2,000 policy holders of the troubled Colonial Life Insurance Company (CLICO) and British American (BAT).
In a statement, the Ministry of Finance said the payments were made to 2, 177 policy holders of the two companies that formed part of the financially troubled regional conglomerate CL Financial.
It said that the funds were issued to CLICO and BAT Executive Flexible Premium annuity (EFPA) contract owners with contracts valued at TT$75,000 (US$12,500) or more.
“Funds were issued through payment of TT$75,000 to individuals with the remaining balance paid through the issuance of bonds. Bonds with maturities from 1 – 10 years may be traded at registered financial institutions between now and March 31, 2012,” the Ministry of Finance added.
It said that bonds with maturities from 11-20 years may be exchanged “dollar for dollar in an entity currently known as NEL 2” and that the deadline for making payments to policy holders is June 30 this year.
Earlier this month, Finance Minister Winston Dookeran said the government had approved the creation of a CLICO Investment Trust that it is likely to meet all outstanding payments to policyholders of the troubled insurance giant within the next four months.
“Cabinet took the decision to approve the establishment of a CLICO Investment Trust,” he said, adding that the 51.9 million shares of Republic Bank which are “now in the hands of CLICO will be transferred to the trust.
“This represents at today’s market value, a transfer of approximately TT$4.8 billion (US$800 million). Those policyholders who will be issued bonds of 11 to 20 year duration will now have access to this trust to purchase units equivalent to their value of their deposit during that period of 11 to 20 years,” he explained.
“We anticipate that the total value of such obligations is in the order of TT$5.2 billion (US$800.6 million) and if they were all to take up this offer, the Government will still have to add a further TT$400 million (US$66.6 million) to the trust in order to have it fully capitalised to do this transaction,” Dookeran said.
Dookeran said the new measure would allow depositors the ability to trade their shares or access the shares and units of the trust. (CMC)