KINGSTOWN, St. Vincent – Insurance laws in Trinidad and Tobago contravene the CARICOM treaty and allow Port-of-Spain to treat its nationals favourably in the face of the fallout from the British American Insurance Co. Ltd (BAICO)-CLICO debacle, according to Prime Minister Dr. Ralph Gonsalves.
And Gonsalves made it plain to lawmakers on Monday that his government believes that all persons affected by the collapse of the insurance companies have to be treated “in precisely the same manner in respect of CLICO-Trinidad”.
“This is not an issue of a negotiation. This is an issue of a juridical responsibility, as we see it,” he said in Parliament while responding to a question from Opposition Leader Arnhim Eustace.
Eustace wanted to know whether the Gonsalves administration would use the EC$10 million (US$3.7 million) received from Trinidad and Tobago from investment in CLICO by the formerly state-owned National Commercial Bank to assist Vincentian annuity holders affected by the “crisis”.
“If I might just say this first of all, widely, a number of institutions have had investments policies, annuities with CLICO-Trinidad … The position of the law in Trinidad and Tobago is that only monies, which are in the statutory fund, can be paid out to policyholders ordinarily resident in Trinidad and Tobago,” Gonsalves said
“We have taken the position that under the Revised Treaty of Chaguaramas that law is contrary to the equal treatment provision of the Revised Treaty of Chaguaramas and therefore has no validity…” he further told lawmakers.
“… if the government of Trinidad and Tobago is treating its own citizens in a particular manner, they must treat everybody in the Community in a like manner.”
Gonsalves said that even though there is “a deficiency of funds in the statutory fund in relation to the liabilities under the policies of CLICO-Trinidad and Tobago, there are other assets, either of CLICO-Trinidad but through its parent entity, CL Financial, in which resources from St. Vincent and the other places went to purchase and we don’t have those assets”.
“So our position is that we have to be treated in precisely the same manner in respect of CLICO-Trinidad. This is not an issue of a negotiation. This is an issue of a juridical responsibility, as we see it,” he said.
He said that in the case of BAICO, “there is a slight difference because British American was a Bahamian company but all its back offices arrangements and trade was done in Trinidad and under the suzerainty, obviously, of CL Financing, a company in Trinidad and Tobago, where its body, mind and soul was resident.
“So that there is a case for the contribution from British American but not to the same extent as there is in respect of CLICO Trinidad,” he further said.
Gonsalves had earlier told Parliament in a ministerial statement that there was some “good news” after leaders of the sub-regional Organisation of Eastern Caribbean States (OECS) and Barbados met and discussed the BAICO-CLICO crisis at the recent CARICOM summit.
He said that US$225 million is needed for the annuities and the OECS and Barbados was seeking to get US$150 million from Trinidad and the Eastern Caribbean Currency Union (ECCU) would provide US$75 million.
Kingstown had “anticipated a particular way in which this would been done through a company” and had budgeted for its contribution to the effort.
However, after the Patrick Manning government was voted out of office in Port-of-Spain, “we had to go to plan B,” Gonsalves said, adding that Trinidad and Tobago was still being asked to contribute US$150 million.
“It looks as though we would have to settle at US$100 million from them,” Gonsalves said, noting that the figure was twice what Trinidad had subsequently said it would have contributed.
“… it turns out that they were capitalising the CARICOM Petroleum Facility and they didn’t inform us in all of the discussion that was going on and we are saying the [US$26 million] that you have there, put that with the [US$50 million] and they will find another [US$24 million] to bring it up to US$100 million,” he said.
Gonsalves said that with the contributions from Trinidad and the ECCU, “we certainly are going to take care of everybody fully below TT$75,000 (approx. EC$34,200)”.