BASSETERRE, St Kitts (CUOPM) -- The St Kitts and Nevis Cabinet has been updated on the ongoing efforts to secure an investor for CLICO International Life (or CIL) which would serve to restore the investments of hundreds of nationals who had invested in the insurance company.
Since the collapse of the CL Financial Group in 2009, the government of St Kitts and Nevis along with other governments of the region has been working to recoup their citizens' investments.
Prime Minister and Minister of Finance, Dr Denzil Douglas, reported that the appointed judicial manager for CIL in Barbados, Oliver Jordan of Deloitte Consulting Ltd, after conducting an extensive search process regionally and internationally, had received non-binding offers from two regionally-based insurance companies for the purchase of CLICO's traditional business.
“The traditional business consists of Individual and Group Life insurance, pensions and annuities. The condition of the sale is that sufficient assets of an acceptable nature must be transferred from CIL to the purchaser and that there would be no cash sale of the assets but rather a discounting of the portfolio liability,” Minister of Information, Nigel Carty disclosed in the Post Cabinet Briefing.
He said the Minister of Finance was careful to highlight that no investor had expressed an interest in the purchase of CIL's Executive Flexible Premium Annuities (EFPA) product as presently structured but that some were interested in considering its purchase under some restructured arrangement.
Carty further disclosed that a recent valuation indicated that the asset position of CIL is in the vicinity of BD$440 million region-wide whereas the policy holder liability position is approximately BD$850 million.
“For St Kitts and Nevis, the policy holder liability of CIL is about BD$9 million or EC$12 million with BD$5.46 million or EC$7.37 million of that amount allocated to the EFPA portfolio and the balance of BD$3.54 million or EC$4.63 million assigned to the traditional insurance business portfolio,” said Carty.
He added that given the nature of the non-binding offer agreements that have been made, the assets of CIL will have to be converted into an acceptable format to facilitate the sale of CIL's insurance business to the new investors.
“A model for achieving this conversion was discussed and may require some limited level of guarantee by regional governments,” said Carty, who noted that Douglas has asked the Cabinet “to consider whether it would support the release of CIL's assets in St Kitts and Nevis to facilitate the proposals.”
“The impact of the model is that all traditional policyholders (that is, individual and group life, pension and annuity policyholders) would become new policyholders of a new insurance company. For the EFPA policyholders, based on the level of success of the asset conversion, there is likely to be a payout of a fixed sum on their outstanding principal, with the balance on the principal discounted and converted into annuities,” said Carty.