Central Bank exits emergency control as Clico pays off $17.3b in debt

Colonial Life Insurance Company (Clico) has paid off $17.3 billion in debt, inclusive of interest, to the government and is looking forward to creating new business and continuing to serve its policyholders.

This was revealed by Clico's executive chairman Claire Gomez-Miller at a press conference at the Central Bank, Port of Spain on Tuesday morning.

On February 13, 2009, the Central Bank gained emergency control of Clico, which, it said, was to "safeguard the interests of Clico’s policyholders and creditors and to prevent substantial disruption posed to the domestic financial system by Clico’s collapse."

A resolution plan was then outlined in 2015 to repay debts to creditors and policyholders "through the sale/transfer of Clico’s own assets and facilitate the sale of Clico’s traditional insurance portfolio to a suitable buyer."

On December 1, the Central Bank relinquished this control.

Gomez-Miller said Clico has now paid off a total of $17,000,297,000 to the government and now owes an interest-inclusive amount of $1,068,130,567.

"Yes, it took us some time but the dedication, the sacrifice made to pay a debt – that's very commendable.

"When we make that (final) payment, we will let everyone know because we will have to be celebrating, because this will be a big achievement."

She said Clico is thankful to not only the government but its staff members – whom she called loyalists – who stuck with the company throughout this journey.

She said 130 employees remained despite not getting salary increases each year and while being on contract, thus never knowing when they may be retrenched.

She praised them for enduring the "emotions" and "trauma."

Central Bank Governor Dr Alvin Hilaire said while the bank could have exited earlier, it was not only focusing on Clico's profitability but also its governance structure, capacity to move forward and the stability of the financial system.

"We felt this was a more opportune time...Things are more solid."

He said in many countries which face financial problems such as these, "They do not have the fiscal space to cater for a bailout for this magnitude.

"They may do part and then they may end up having to borrow externally and pay back in forex over time, so their debt goes up."

He said the bank is pleased that conditions are now "satisfied" so it can "comfortably exit."

He added that the exit does not mean it is no longer involved as it still acts as a monetary authority and a supervisor/regulator of financial institutions.

In addition to this, Hilaire said that within the next few weeks, the bank will also exit emergency control of British American Insurance Company (Trinidad) (BAT).

He said both parties are now "tidying up some administrative finalities," before further announcements are made.