CLICO reduces taxpayer debt to $ 1.6 billion | Local company

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Colonial Life Insurance Company (Trinidad) Ltd (CLICO) debt to the government is now approximately $ 1.6 billion.

Express Business understands that the Minister of Finance has issued a directive to the Central Bank for CLICO to release $ 400 million to the State.

In response to questions from Express Business, Central Bank Communications Officer Nicole Crooks replied: “As of May 31, 2021, CLICO’s outstanding debt to the government of Trinidad and Tobago was to about $ 1.6 billion.

CLICO has been under the control of the Central Bank since February 13, 2009, when Article 44 (D) of the Central Bank Law was triggered to allow the Bank to exercise its special emergency powers to intervene and manage financial institutions.

Article 44 (F) 5 of the Law on the Central Bank states: “In the exercise of its functions and in the exercise of its powers under Article 44D, the Bank shall comply with all general instructions or special measures of the Minister and will act only after due consultation. with the minister.

In a 2011 amendment, 44E (7) of the law also requires the Central Bank to report quarterly to Parliament and the High Court on the progress of proposals for restructuring financial institutions that have come under the control of the Bank 44 (D).

In March 2021, in its report to the High Court and Parliament on its handling of CLICO, the Central Bank said that CLICO was now solvent and that it still owed the government $ 2.09 billion under its plan. rescue program of 2009.

“In summary, of the approximately $ 18 billion (including preferential interest owed) provided by the government to CLICO, approximately $ 16.6 billion was repaid by CLICO, leaving a balance of approximately $ 2 billion. , $ 09 billion as of February 28, 2021, “the court report noted.

The report had noted that since 2017, there were several ministerial directives issued to the insurance company for assets or cash that were used to offset its debt to the government.

The report noted that as of January 24, 2019, CLICO had paid approximately $ 5 billion in cash to the government “in return for an appropriate reduction in CLICO’s debts to GORTT.”

“Another cash payment of approximately $ 300 million (paid in installments) was made to GORTT by CLICO between March 20 and 27, 2020.

“An additional $ 125 million was paid to GORTT on July 8, 2020.

On September 17, 2020, in accordance with another ministerial instruction, CLICO was ordered to pay GORTT $ 600 million, in cash, in two installments in exchange for an appropriate reduction of debts owed to GORTT. The first installment of approximately $ 300 million was paid to GORTT on September 30, 2020 and the second installment of approximately $ 300.1 million was paid in two parts on October 24, 2020 and October 30, 2020, respectively ” , did he declare.

CLICO’s audited 2019 report showed that CLICO’s after-tax profits fell 95% for the year ending December 31, 2019.

CLICO recorded an after-tax profit of $ 119.23 million in 2020, compared to $ 123.69 million in 2019, while its net results from investing activities totaled $ 118.05 million in 2020, compared to $ 223.45 million in 2019.

Its net results from insurance activities declined to a loss of $ 145.41 million in 2020, from a loss of $ 178.73 million in 2019.

Despite declining profitability, CLICO’s positive net worth reached $ 3.23 billion in 2020, up from $ 3.22 billion in 2019.

Its total assets stood at $ 13.55 billion at the end of 2020, while its total liabilities were $ 10.31 billion.

CLICO has been under the control of the Central Bank for over 12 years.

In an interview earlier this year, Central Bank Governor Dr Alvin Hilaire said the bank was impatient for T & T’s financial institutions regulator to close the book on this country’s biggest bailout.

“Like I told you before, we want to get out of this business yesterday. Right? We are not running insurance companies. Most of the conditions no longer exist with respect to the systemic problem. And in terms of the health of the financial system, we therefore do not have a systemic problem, ”he said.

The sale of the traditional CLICO and British American (Trinidad) portfolios to Sagicor remains blocked following an injunction granted to Maritime Life (Caribbean) Ltd in July 2020.

Article 44G of the Central Bank Law sets out the requirements under which the Central Bank may terminate its supervision of a financial institution under Article 44 (D).

Article 44 (G) states that the Central Bank (1) Where the Bank has, under Article 44D, taken control of an institution, the Bank shall, subject to paragraph (2), remain under control of and “may continue to operate. of this institution until the Bank … it deems appropriate (to issue) a notification indicating that it has ceased to exercise control over the institution.

The section states: “The Bank must relinquish control and must not continue to carry on the activities of an institution where:

(a) the circumstances on the basis of which the Bank took control of the institution under Article 44D have ceased to exist;

(b) the Bank is of the opinion that it is no longer necessary for it to retain control of the affairs of the institution; or

(c) the Bank has sold or otherwise disposed of the property, assets and businesses of the institution.

Article 44 (G) 4 of the Central Bank Law states: “Where the Bank has, in accordance with Article 44D, taken control of an institution, the High Court may, at the request of the administrators of the the institution acting independently of the Bank, if it is convinced that it is no longer necessary for the protection of the institution’s depositors or creditors for the Bank to retain control of the affairs of this institution, order the Bank to cease to control the affairs of that establishment from a date specified in the Order.

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