(Trinidad Guardian) The Central Bank on Monday confirmed a Sunday Business Guardian exclusive story that the Government is planning to dispose of Clico’s traditional portfolio—life insurance, health coverage and long-term annuities—as part of the resolution strategy for the financially strapped insurance company.
The Central Bank, in a statement signed by Governor Jwala Rambarran, was responding to the story headlined “Howai: Clico could go to foreign buyer…systemic risk for locals.” In the statement, Rambarran said the Central Bank was in control of Clico, pursuant to Section 44D of the Central Bank Act and it was the only entity empowered to restructure the business or undertakings of Clico, in accordance with the provisions of the act. While section 44D gives the Central Bank extensive powers to take control of companies in which “the interests of depositors, creditors, policyholders or members of an institution are threatened,” those powers are subject to section 44F (5) of the Central Bank Act, which states: “In the performance of its functions and in the exercise of its powers under section 44D, the bank shall comply with any general or special directions of the Minister (of Finance) and shall act only after due consultation with the Minister.” Rambarran’s statement said in order to sell Clico “the Act requires the Central Bank to have a market price for Clico’s traditional portfolio determined by an independent valuation company. An independent actuarial firm has, therefore, been engaged to value Clico’s traditional business for this purpose and the exercise is still in progress.”
The Sunday BG article quoted Howai as stating that the firm conducting the actuarial review of Clico is the New York-based professional services firm, Towers & Watson. The valuation exercise is expected to be completed next month. The Central Bank statement said after the valuation was completed, “the Central Bank will conduct the process for the sale and transfer of Clico’s traditional insurance portfolio on a transparent, open market basis.