Ingraham Government will deliver a $30 million Guarantee to Clico

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ingraham_0455_1_Communication to Parliament on Clico (Bahamas) Ltd. by Rt. Hon. Hubert A. Ingraham/Prime Minister

Mr. Speaker,

In my previous Communication to Parliament in respect of Clico (Bahamas) Limited (Clico), I gave some background information on the Company and on events leading to the decision to Petition to the Supreme Court of The Bahamas for that Company to be placed into compulsory liquidation.

I, therefore, wish to focus this Statement on the Government’s decisions in this matter going forward, having regard to the proposals made by the Liquidator for the sale of some of Clico’s insurance business, and the protection of policyholders and annuitants of Clico.

Mr. Speaker,

Prior to outlining the Government’s decisions, it is necessary to indicate to this Honourable House the preliminary findings of the Registrar of Insurance Companies as to the financial condition of Clico.

The Office of the Registrar of Insurance Companies advises that there is a gap between the assets and liabilities of Clico leaving a net liability of $42 million.There are realizable assets estimated at $85 million, and adjusted liabilities of $127 million. Policy liabilities are estimated at $73 million and other liabilities at $54 million. As policy liabilities may have a first claim on all assets it is therefore expected that policy liabilities are fully covered.

Notwithstanding that ultimate circumstance, many policyholders have expectations that day-to-day contractual obligations arising under the terms of their different policies should be honoured if they continue to keep such insurance policies in force, by virtue of the payment of their insurance premiums. In order for this expectation on the part of policyholders to have any hope of realization it is necessary to sell that part of Clico’s insurance business relating to such policyholders liabilities to one or more active insurance companies with the capability of successfully managing the assets and servicing the liabilities.

Mr. Speaker,

We are advised that insurance companies are unwilling to purchase Clico’s policies and assume the possible exposure of $30 million without a Government Guarantee.

In order to facilitate the sale of Clico’s policy liabilities the Government has agreed to provide such a guarantee. The Guarantee will be in relation to the following policies to the extent of the limits shown:

TABLE I

Policy Type Limit of Guarantee
Life Up to $300,000 of insurance coverage
Accident & Sickness Full Amount
Annuity-Gold Retirement Up to $100,000 of accumulated value
Annuity-Executive Flexible Premium Annuity (EFPA) Up to 100,000 of accumulated value
Group Life, Medical and Annuity Full Amount

It is expected that this Guarantee would be for a maximum of $30 million and for a period of five years. The Guarantee would not apply to policies and annuities of Directors and Senior Management of the company or persons closely related to them; nor would it apply to institutional or corporate policy holders or annuities.

Only policies which are in force would be covered by the Guarantee and the maximum covered by the Guarantee would be the limit shown in Table I regardless of the number of accounts which any single policy holder has.

Mr. Speaker,

In order to accommodate the operational requirements necessary for this proposed insurance Guarantee, the Government will establish a Statutory Insurance Guarantee Fund with the duty to provide protection for Bahamian policy holders in the event of failure of an insurance company engaging in domestic insurance business.

10 COMMENTS

  1. Bahamas Press you are 100% correct that as it stands today the Bahamian people are 100% owners of BTC,however during the prime minister’s budget speech he made it clear that BTC will be sold very early in the new financial year.Originally,in 1997 the prime minister stated that he will sell 49% of BTC now he claims it will be 51%.I am hoping and trying to get Bahamians a piece of BTC before the prime minister decides to sell these foreigners 75%-100% of BTC.I too am beginning to believe that the prime minister who in 1992 told the nation that his grand mother gave him an obeah hat,and thus we can safely assume that he must PRACTICE OBEAH SINCE HE WORE THAT HAT THROUGH OUT THE ELECTION CAMPAIGN, he must have gone to Haiti for additional powers.

  2. Here’s a free suggestion for the prime minister rather than informing the teachers,doctors and nurses that you cannot live up to your contractual agreements made with their unions, become creative.The prime minister could offer these professionals shares in BTC/Bank Of The Bahamas in lieu of an increase in salary.These shares willnot cost the government anything since the government is the owner of 51% of the said bank and 100% of BTC.By doing this government will be empowering Bahamians and encouraging them of seeing the benefits of investing.Government can also sell some shares in the previous mentioned businesses to the civil servants via salary deductions,again this will not cost the government anything and will reduce the government’s payroll.

    • NO NO Kevin don’t forget now, today they all own BTC 100% already, so that cannot happen. He want take their raise and he want take their salaries [if he could] and he want take BTC from them. These kinds of so called leaders are called “SELL OUTS!

      I mean in two short years the FNM government all in the Church boasting how almost 10,000 people lost their jobs under their watch and applied for the unemployment package. MY GOODNESS, and the people in the church saying AMEN, clapping! Imagine that now, someone lost their job of $3,000 per month and was building my apartments and someone in the INGRAHAM Cabinet boasting how they now on the unemployment benefit!? That’s progress from the STOP, CANCEL, REVIEW TEAM for ya ech?

      I don’t know what Hubert found when he went into the mountains of Haiti on vacation last year, but whatever it is, it’s working!

      Bahamas Press/Editor

  3. It matters not to me if mr.Ingraham’s friend is Perry Gladston Christie,the police should have been called in to investigate the disappearance of $73 million dollars.The laws of the Bahamas must be applied across the board.After the police with the help of a forensic accountant what have finished their investigation then let the Attorney General bring those cases to court even if the villian is mr.Christie.By the way Joe Blow if mr.Ingraham has some knowledge of mr.Christie’s failure to carry out his job after being made aware of the Clico fiasco that will be a crime if mr.Ingraham does not assist the police,i believe it can be termed AIDED AND ABETING in the commission of a crime.

    • Kevin lets be realistic, the police [balice….lol] cannot figure out how someone was let out of their own cell. And that’s their own cell, so what you think when money goes missing from someone else cage, especially knowing that all the money gone. Mannnnn, come on Kevin, I thought better a you, this the Bahamas not Scotland Yard.

      [Funny joke, anyone remembered when the Scotland yard detective got robbed here in Nassau? Boy I laughed for 3 weeks….. I wonder if they ever found the rubber? hmmmmm]

      BP

  4. Correct me if I’m wrong but doesn’t this remind one of Gulf Union Bank?
    Mr. Ingraham as minster of Finance allowed the owners to take the company’s money out of the country and then guaranteed the deposits with $4mil. of tax payer’s money?

    At least Mr. Ingraham is consistent. We can trust in that!!!

    • Ahhhhh, now bahngr your a bright BRIGHT kid indeed, you know we totally forgot about that. Hmmmmm, what year was that 1992,3? lets seeee…

      BP

  5. And Mr. Ingraham’s friend is Perry Christie, under whose watch the money was spirited out of the country??? With HAI it is again a case of “damned if you do-damned if you don’t!” Many called for Mr. I to protect those poor policy holders and now he has done it to the extent he can, some are going to fault him? For all of you policy holders who stopped payment because unthinking, uninformed persons advised you to, don’t now come crying for sympathy! Yes, indeed, it is a matter of trust!

  6. I will continue to sing solo.This act of the government to guarantee $30 million dollars for the purpose of purchasing the policy holders part of the business from Clico is WRONG AND CRIMINAL!!Government can find money to offer the new owner of Clico when ordinary Bahamian home owners need a guarantee from government to the various banks so that their mortgages don’t go into foreclosure.Real investors/business persons conduct intensive research into an investment and then decide if the RISKS associated with that venture is acceptable to them. If the risk is acceptable they will then pursue that business,however,here we have rich owners of well established insurance companies craving to earn millions of dollars more who want the over taxed Bahamian tax payers to assume all the risk.In this case government might as well let National Insurance acquire Clico’s policy holders portfolio so at least the Bahamian people will benefit from the profits.I am tire of HUBERT ALEXANDER INGRAHAM USING US AS JACK DONKEYS.Notice $73 million disappeared from Clico and the police have yet to conduct an investigation!!I have now come to the sad conclusion that if you are mr.Ingraham’s friend,you can get away with massive theft-once its done in the Bahamas!!

  7. Trinidad AG Resignation Brings Calls For Finance Min. To Go

    CaribWorldNews, PORT-OF-SPAIN, Trinidad, Thurs. May 28, 2009: The resignation of Trinidad and Tobago`s Attorney General, Bridgid Annisette-George, over a conflict of interest in the investigation into CLICO, has now brought calls for the country`s finance minister to also go.

    T and T`s opposition wants Finance Minister Karen Nunez-Tesheira to also call it quits, since it has been reported she owned CL Financials assets yet lead the bailout of the company.

    Nunez-Tesheira has denied there was a conflict or that she benefited from TTD$11 million dollars of tax payer’s money when she cashed in her CL Financial policies and received a one-million-dollar Leroy Clarke painting from the company, which collapsed in February and had to be bailed out.
    The Central Bank has hired forensic investigator Bob Lindquist to review CLICO`s documents.

    Meanwhile, Annisette-George, who was appointed Senator and Attorney General on November 8, 2007 and became the third woman to hold this post, will demit office on Friday morning and will be replaced by former Attorney General John Jeremie. Jeremie is currently the High Commissioner to London.

    UNC leader Basdeo Panday says appointing Mr. Jeremie is the `tragedy of the century.`

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