The Vincentian economy lost EC$290.12 million in the collapse of the two Trinidad-based insurance giants in 2009, for which the Caribbean Court of Justice (CCJ) ruled in October that Port of Spain 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 $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.
However, the CCJ, which is based in Trinidad, ruled that if BACOL’s arguments were correct, “it would mean that the defendant would have been responsible for bailing out all BAICO policyholders in other Caribbean territories”.
Minister of Finance Camillo Gonsalves told Parliament on Thursday 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 $33.2 million. So, the amount outstanding as of today is $158.99 million,” he said in response to a question from opposition lawmaker, Central Kingstown MP, 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 SVG, there are 39 policies totalling EC$22 million in principal and EC$11.6 million in interest.
For individuals, there were 149 policies with an accumulated balance of EC$45 million.
“It’s worthwhile to note that all policyholders of $30,000 or less have been fully settled,” the finance minister said.
In his question Leacock, who is Central Kingstown MP, 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 VINLEC, and for the financial sector, commercial banks, credit unions, insurance companies, etc.
Leacock also asked Gonsalves to state the loss to private individuals over EC$1 million and the loss to other investors.
He also 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 EC$5 million 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 $1.9 million and six executive flexible premium annuities totalling $9 million.
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.
The finance minister told Parliament that other investors held EC$179.5 million — EC$70.5 million in CLICO and EC$109.4 million in BAICO.
The debtor of last resort is the regulator who issued a license to operates and fail to have the insurance company follow the laws as It applies to insurance companies.
So the government of st.vincent and the grenadines is responsible for the repayment to the policy holderS