The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The transfer of CLICO (Bahamas) 14,000-strong insurance policy portfolio to a new underwriter is being held up by the protracted delay in obtaining the long-promised $30 million Government guarantee, Tribune Business can reveal.

The insolvent insurer’s liquidator, Baker Tilly Gomez accountant and partner, Craig A. ‘Tony’ Gomez, in his 10th report to the Supreme Court, said that as of end-June 2012 the guarantee had still not been completed by the Attorney General’s Office.

Tribune Business understands that since then, despite meeting with the Cabinet and officials from the Ministry of Finance/Attorney General’s Office, the $30 million guarantee still has not been completed.

Obtaining the guarantee is vital to transferring CLICO (Bahamas) remaining life, health, pension and annuity policies to another insurance carrier. Given the insolvent insurer’s solvency deficiency, with liabilities likely exceeding recovered assets, the guarantee is needed to ‘back stop’ or underwrite the purchase by another carrier.

Tribune Business understands that potential buyers have already communicated to Mr Gomez that they will not be interested in acquiring the CLICO (Bahamas) portfolio unless the Government’s $30 million guarantee is in place. And, of course, transferring the remaining policies to another insurer is one of the most vital steps to concluding a successful CLICO (Bahamas) liquidation.

“I am currently in discussion with three prospective buyers seeking to acquire CLICO’s life, health and pension policies,” Mr Gomez said in his report. While all had signed the confidentiality agreement, Tribune Business understands they were Family Guardian, Colina Insurance Company and Scotiabank (Bahamas).

The latter two, though, are understood to have largely fallen away, and Family Guardian is thought to have indicated it is not interested in a deal without the Government’s guarantee. There has also been some international interest in the CLICO (Bahamas) portfolio, though.

“The Government of the Bahamas has stated that it will provide a guarantee of $30 million to CLICO to assist in the anticipated shortfall in the liquidation,” Mr Gomez said in his report.

“However, it is anticipated that the Government will be reimbursed for any funds utilised under the guarantee from funds received by the liquidator from the sale of CLICO’s assets and funds otherwise recovered.”

Yet he added: “The guarantee is being drafted by the Office of the Attorney General, and as at the date of this report the document has not been completed. I am preparing to meet with Prime Minister Christie’s administration to continue my discussion on the guarantee. A meeting with the Ministry of Finance is tentatively scheduled for July 30, 2012.”

At end-June 2012, CLICO (Bahamas) portfolio contained 13,835 policies with a total surrender value of $20.074 million and cumulative sum assured of $1.093 billion.

Otherwise, there were few new developments detailed in Mr Gomez`s report. CLICO (Bahamas) Bahamian balance sheet showed a solvency deficiency of $22.162 million at June 30, 2012, with total assets worth $44.794 million outmatched by liabilities totalling $66.956 million.

Mr Gomez had also made little progress in enforcing the $58 million guarantee given in favour of CLICO (Bahamas) by its Trinidadian ultimate parent, CL Financial. If that is successfully enforced, it could repair the hole in the Bahamian insurer`s balance sheet.