CLICO story to be told in Parliament tomorrow
THE facts surrounding the past, present and future of CLICO will be laid out in the House of Assembly tomorrow.
This assurance was given by Prime Minister the Rt. Hon. Freundel Stuart, who was speaking on the CLICO International Life Insurance Ltd. Guarantee Amendment Act 2017 in the Lower Chamber on Tuesday night.
He said during the debate on Friday, Honourable Members will have their say and will also be able to “see the road travelled, the cost of the road travelled and what the outcomes will be”, as Government tries to bring final pieces of legislation to bring the matter to a close.
Explaining that the amendments on Tuesday were just housekeeping which essentially lays the foundation for other resolutions to follow, the Prime Minister said the passage of the Act in 2015, where certain “specific figures” were put in Sections 5 and 6 of that Act, it has since been discovered that there has to be adjustment to these figures after valuations have been done on the actuarial liabilities pertaining to the policyholders on the Barbadian register of CLICO.
“In the existing legislation, the funding limit under Section 5 of the Act, from the demand note which the Government of Barbados was guaranteed, the figure of $215 million appears. But more recent valuations have now disclosed that a more correct [figure] would be $220 million. And therefore, an amendment to change the figure to $220 million under Section 5 of the Act is being called for. The House is being called upon to so approve.”
PM Stuart added that under Section 6 of the Act, the legislation as presently worded calls upon the Government to guarantee the sum of $126 million for Resolution Life Assurance Company Ltd.
“Closer examination has now revealed that that would put the Government in a difficult position in terms of this debt stock, but also would compromise Resolution Life Assurance Company itself. And therefore Section 6 is being amended to commit the Government to guaranteeing a bond to be issued by New Life Investment Company Inc. to Resolution Life Assurance Company Ltd., for an amount not exceeding $127 million, so that that issue can be resolved.”
He said that this latter amendment is in respect of the restricted ten-year fixed annuities of the Individual and Executive Flexible Premium Annuity Policyholders.
“It will be recalled that these policyholders constitute a special category of policyholders with CLICO International Life Insurance Company Ltd. The Executive Flexible Premium annuities constituted a very substantial investment on the part of policyholders,” he said, separate and distinct from ordinary policyholders.
“So having regard to the kind of amendment that is being requested of Section 6, the caption of the section would also have to be amended to indicate that the Government is not guaranteeing payments, to guarantee of bonds in support of the restructured ten-year annuities. That basically is the extent of the amendments of Section 5 and Section 6 of the 2015 legislation.
“We will have to come back to this whole issue because there are some resolutions to follow, but these amendments have to be done first in order to provide the grounding or the resolutions to follow. I believe that at that time, we can have a full debate on the settlement of the CLICO arrangements and Honourable Members will have a chance to fully express themselves,” Prime Minister Stuart assured.
“This matter has dragged on for a very long matter. It is essentially a private sector matter in which the Government was forced to get involved in order to protect the financial system and in order to protect large numbers of policyholders,” he said. (JH)