From Caribbean360

PORT-OF-SPAIN, Trinidad, Tuesday September 23, 2014, CMC – The Trinidad and Tobago government has confirmed that it intends to sell the financially troubled Colonial Life Insurance Co Ltd (CLICO), whose collapse in 2009 sent ripples throughout the Caribbean.

Finance Minister Larry Howai, speaking at the meeting of the Standing Finance Committee of the House of Representatives, said that the coalition People’s Partnership, which like the previous Patrick Manning administration had pumped billions (One TT dollar =US$0.16 cents) into the embattled company, would only agree to the sale, once the price is right.

Howai told the historic and inaugural meeting of the Committee that government would be paying out TT$258 million before year end to several Eastern Caribbean countries for managing the costs involved in the CLICO fallout.

The Standing Finance Committee is discussing the TT$9.4 billion dollar national budget approved by Parliament earlier this month.

Howai said the government made no provisions for Atrius in 2015, , the company which was 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 discomposing of the portfolio by way of a portfolio sale,” Howai said.

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 prices 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 to advise it on how to proceed.

Howai also confirmed that government paid TT$258 million to the Organisation of Eastern Caribbean States (OECS) in relation to the CLICO collapse. Howai said this money was a grant, not a loan.

Asked by Opposition Leader Dr Keith Rowley whether there were any assets of CLICO in these countries which could have been taken, Howai said attempts were made to realise the assets of CLICO but 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.

He said as a condition of disbursement (of the $258 million), the Trinidad and Tobago government asked those countries to remove these restrictions and also asked those countries to put mechanisms in place to strengthen their regulatory environment so there is no repeat of the CLICO debacle.

IMAGE: clico_450x350_628456788

For more on this story go to: http://www.caribbean360.com/business/trinidad-government-confirms-clico-for-sale-if-the-price-is-right#ixzz3EA0XUvF0