Photo credit: Caribbean Business Report
St Vincent and the Grenadines Minister of Finance Camillo Gonsalves says the country’s economy lost an estimated EC$290.12 million (US$107 million) following the collapse of the two Trinidad-based insurance companies in 2009.
In October, the Trinidad-based Caribbean Court of Justice (CCJ) ruled that the Trinidad and Tobago government was not responsible for the losses sustained outside that jurisdiction. The 2009 collapse of British American Insurance Co. Ltd (BAICO) and Colonial Life Insurance Co. Ltd (Clico) resulted in losses of EC$800 million to businesses and individuals across the Eastern Caribbean, BACOL, a group of policyholders from both companies had claimed in a lawsuit against the government of Trinidad and Tobago.
Gonsalves told Parliament that with BAICO, EC$192.2 million was due to St. Vincent and the Grenadines policyholders at the beginning of the judicial management. “We’ve recovered EC$33.2 million. So, the amount outstanding as of today is EC$158.99 million,” he said in response to a question from opposition lawmaker, St. Clair Leacock.
As regards Clico, Gonsalves said the “liability for executive premium annuities is EC$79.1 million while traditional business accounts are EC$52 million”.
There were 1,899 executive premium annuities worth EC$79 million, made up of a principal of EC$58 million and interest of EC$21 million. To corporations in St. Vincent and the Grenadines, there are 39 policies totalling EC$22 million in principal and EC$11.6 million in interest.
Gonsalves said for individuals, there were 149 policies with an accumulated balance of EC$45 million.
“It’s worthwhile to note that all policyholders of EC$30,000 or less have been fully settled,” he said.
In his question Leacock, said that in the recent court decision, “it was held that the Trinidad and Tobago government has no legal responsibility for non-Trinidadians on what some call the Clico/BAICO Fiasco in which many lost their life savings/investments”.
He asked Gonsalves to state the extent of the loss to public institutions such as the National Insurance Services and the St. Vincent Electricity Services Limited (VINLEC), and for the financial sector, commercial banks, credit unions, insurance companies as well.
Leacock also asked Gonsalves to state the loss to private individuals over one million dollars and the loss to other investors. In addition, he wanted to know the accumulated loss to the Vincentian economy and whether there was any culpability by the Vincentian government.
The Finance Minister said that the extent of credit unions’ exposure to Clico was EC$7.5 million and EC$14.95 million to BAICO, for a total of EC$22.5 million.
Commercial banks had invested EC$900,000 in Clico and zero in BAICO. Non-governmental financial institutions lost five million EC dollars to CLICO and EC$23.5 million to BAICO.
Government and quasi-government institutions lost EC$36.26 million to Clico and EC$17 million to BAICO, while other local policyholders and investors lost EC$70.5 million to Clico and EC$109.4 million to BAICO.
“That’s inclusive of interest,” Gonsalves said.
Meanwhile, private individuals have invested in Clico one flexible premium annuity of EC$1.9 million and six executive flexible premium annuities totalling nine million EC dollars.
In BAICO, there were 20 individual policyholders above EC$1 million, for a total of EC$26.07 million.
“So, in the individual segment, that would be $36.97 million,” Gonsalves said, telling legislators that other investors held EC$179.5 million — EC$70.5 million in CLICO and EC$109.4 million in BAICO.